Monetary Policy of Bernanke

Ben Bernanke is current Chairmen of US national withstand and his task is to check out appropriate pecuniary form _or_ system of government in order to repair countrys frugal and fiscal performance. Bernanke argues he has to wrick closely with all members of the Committee be grow it is the precisely port to develop monetary insurance in such a way that it would fit countrys inescapably and demands.Therefore, the paper discusses issues of monetary insurance offered by Bernanke as well as understands put to work of globalization on boilers suit monetary policy of the country. Actually, Bernanke is interested whether ongoing frugal globalization and integration affects US monetary policy. Monetary policy ope pass judgment in pecuniary and economic environment being powerfully affected by integration.Bernanke notes that monetary policy instead of stabilizing economic and financial situation in the country does slim to drive powerful economic forces and to cause stru ctural changes necessary for policy. Bernanke claims that if national replacement wants to develop effective monetary policy, it should, firstly, be fully aw atomic number 18 of all factors which are able to affect and determine the overall economic growth, inflation and employments rates in the joined States.Chairman asserts that countrys prudence should be open to other(a) countries because openness plays crucial voice in monetary policy affecting scathe stability and sustainable employment indoors country. Further more(prenominal), economic openness also assists Federal Reserve in meeting congressional mandate.Bernanke cites analysts who argue that globalization puts obstacles to US monetary policy because it aims at reducing US interest rates of Federal Reserve and asset price. Also globalization diminishes the role of domestic factors affecting inflation process. Nevertheless, Bernanke doesnt support such idea claiming that he is sure globalization should be involve t o increase effectiveness of monetary policy. globalisation and Monetary Institute was established to canvass impact of globalization no economy and policy of the country.Bernanke argues that monetary policy affects above all countrys financial conditions and asset prices and interest rates are under attack. Consequently, changes taken place in financial conditions would affect many households and firms, as well as would affect production, inhalation and investment opportunities. Thus, Bernanke states that the financial environment in which U.S. monetary policy is made has been irrevocably changed by the remarkable increases in the magnitudes of financial flows into and out of the United States. (Bernanke 2007)Therefore, he argues that he Federal Reserve should pay more attention to financial stability by controlling federal bullion and interest rates. Banks loans should be carefully considered as well. He recommends using open-market operations because due to policy of openness the Federal Reserve would be able to manage constant fork out of funds, inter-bank markets. Such policy impart lapse federal funds close to the targeted rates and international integration of financial markets will not be affected or prevented. Further, Bernanke admits that the Federal Reserve should take prudish control over the federal funds rates because they strongly affect short-term dollar nominal interest rates.Bernanke promotes cooperation of the Federal Reserve with modern central banks because it gives refined opportunity to conduct monetary policy, to examine economic and financial data obtained from diverseness of markets, and to apply those data when considering economy and inflation. Bernanke says it is necessary to seek for alternative courses of policy to improve effectiveness of monetary policy and macroeconomic performance of the country.He recommends developing economic models to guide policymakers and forecasting techniques to ensure sustainable progress. Bernanke assumes that monetary policymakers must therefore make a motion a difficult balance conducting harsh analysis informed by pass away economic theory and empirical methods period keeping an open mind nearly the many factors, including myriad global influences, at play in a driving modern economy like that of the United States. (Bernanke 2006)ReferencesBernanke, Ben. (2007, swear out 2). Globalization and Monetary Policy. Retrieved April 19, 2007, from http//www.federalreserve.gov/boarddocs/speeches/2007/20070302/Bernanke, Ben. (2006, February 15). attestation of Chairmen Ben S. Bernanke. Retrieved April 19, 2007, from http//www.federalreserve.gov/boarddocs/hh/2006/february/testimony.htmBernanke The Yield Curve and Monetary Policy. (2006, March 20). Retrieved April 19, 2007, from http//economistsview.typepad.com/economistsview/2006/03/bernanke_the_yi.html