While his pride for the Fed is great, his pride for macroeconomics as a discipline is greater. Even in our current inflationary crisis, he doesn’t think regime change at the Fed is needed. But he’s not particularly taken by any single new approach. He also discusses increasing coordination between monetary and fiscal policy as a possible new track for the Fed to follow. He looks at price-level targeting, nominal GDP targeting, and raising the inflation target, and considers pros and cons for each. He’s very hesitant about any major structural changes to the Fed’s independence or framework.īernanke evaluates a number of different approaches to monetary policy than the one the Fed has actually adopted. He doesn’t have any grand, sweeping pronouncements. That spirit of learning from mistakes and making incremental improvements embodies Bernanke’s approach to monetary policy. But thanks to you, we won’t do it again.' He famously confirmed Milton Friedman and Anna Schwartz’s thesis that the Fed deepened the Great Depression: 'You’re right, we did it. That may lead him astray at times, but he does see defects. But overall, his approach to history is descriptive.īernanke’s tone is always sympathetic toward the Fed, and you can tell he takes great pride in the institution. There are a few spots where he switches to first-person narration, and it can be a bit jarring as you remember: That’s right, this guy actually made these decisions. The book is not a memoir (that came out in 2015). He does so in such a way that sometimes you forget he was there. And of course, he writes about his own tenure. He writes about Paul Volcker’s victory over inflation, when the Fed became 'the only game in town.' He writes about the Great Moderation of the ’90s and early ’00s under Greenspan. He tells the story of how the Fed responded to the Great Inflation of the late 1960s and ’70s-and how it failed.

That may not work for everyone, but knowing the history of monetary policy is crucial to understanding its future, and Bernanke understands that on a deep level.

George Will has said that if he were in charge, the only major anyone would be allowed to choose in college would be history. Therein lies the value of his outlook, which couldn’t come at a more crucial time. Bernanke’s book may be titularly about the 21st century, but much of it is history. One thing’s for sure: Bernanke did not learn his communication skills from Alan Greenspan.īut he did learn from Greenspan, and from all the Fed chairs who preceded him. He explains the basics of monetary policy much better than textbooks and keeps sentences short and simple. Bernanke doesn’t assume you know what 'quantitative easing' or 'Phillips curve' actually mean and takes time to explain them in a way that’s neither overbearing nor belittling. 21st Century Monetary Policy is 100 percent white-meat prose and certified equation-free. Former Federal Reserve chairman Ben Bernanke’s new book is probably the easiest-to-read 500-page book on monetary policy ever written.

For the love of money