Caroline Baum on Greenspan’s AEA Talk

The ever-savvy Caroline Baum struck an appropriate mix of criticism and congratulation in her Bloomberg column today about Alan Greenspan’s AEA speech last weekend. In short, she thinks Greenspan has good reason to be pleased about his bubble-fixing policies for the bubble that wasn’t a bubble, but she rightly worries about the effect of a continuing negative funds rate in a now-booming economy:

“It’s an invitation to runaway borrowing (bank credit has been unchanged for the past six months). It’s likely to lead to a misallocation of capital into interest-rate sensitive sectors of the economy, such as housing. And historically it’s ushered in higher inflation.”

Related posts:

  1. Paul Krugman & the “so-called boom”
  2. Greenspan versus Greenspan

Comments

  1. bob sbarra says:

    caroline,
    what is your e mail address?