I and others were mistaken early on in saying that the subprime crisis would be contained. The causal relationship between the housing problem and the broad financial system was very complex and difficult to predict.

The more guidance a central bank can provide the public about how policy is likely to evolve the greater the chance that market participants will make appropriate inferences.

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.

September and October of 2008 was the worst financial crisis in global history, including the Great Depression.

I come from Main Street, from a small town that's really depressed.

In fact, the world needs more nerds.

While rising delinquencies and foreclosures will continue to weigh heavily on the housing market this year, it will not cripple the U.S.