The risk exists that, with aggregate demand exhibiting considerable momentum, output could overshoot its sustainable path, leading ultimately in the absence of countervailing monetary policy action to further upward pressure on inflation.

The basic prescription for preventing deflation is therefore straightforward, at least in principle: Use monetary and fiscal policy as needed to support aggregate spending, in a manner as nearly consistent as possible with full utilization of economic resources and low and stable inflation. In other words, the best way to get out of trouble is not to get into it in the first place.

Not all information is beneficial.

Life is amazingly unpredictable; any 22-year-old who thinks they know where they will be in 10 years, much less in 30, is simply lacking imagination.

Developments in financial markets can have broad economic effects felt by many outside the markets.

The benefit of appointing a hawkish central banker is the increased inflation-fighting credibility that such an appointment brings.

It is not the responsibility of the Federal Bank - nor would it be appropriate - to protect lenders and investors from the consequences of their decisions