The financial crisis appears to be mostly behind us, and the economy seems to have stabilized and is expanding again.

A money-financed tax cut is essentially equivalent to Milton Friedman's famous 'helicopter drop' of money.

A collapse in U.S. stock prices certainly would cause a lot of white knuckles on Wall Street. But what effect would it have on the broader U.S. economy? If Wall Street crashes, does Main Street follow? Not necessarily.

With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly.

House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals.

We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.

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