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Showing posts with the label Jeremy C. Stein

Unasked Questions for Yellen

Soon after Janet Yellen's confirmation hearing, Nouriel Roubini prepared a list of ten important questions nobody had asked her, and tweeted them. Of course, given the nature of twitter, he had to offer these questions one by one. Given the nature of a blog, I can put them all together for him here. 1. Do you support optimal control, the notion that inflation sometimes has to be allowed to go above target? 2. You have written that inflation may have to go above target for awhile to reduce labor slack. Do you support this optimal control? 3. Do you agree with Governor [Jeremy C.] Stein that macro-pru will not be sufficient to control bubbles? Would you raise rates sooner to prick bubbles? 4. While you say 'no bubble' today, what is the risk that slow QE exit and policy rate normalization over  4 years will cause bubbles down the line? 5. If the current approach to too-big-to-fail will not work would you down the line support breaking up big banks to deal with ...