Ben Bernanke Takes to Blogging and Twitter
Former Federal Reserve Chairman, Ben Bernanke - once the most powerful man in the country - has started blogging in addition to getting active on Twitter.
Today, Mr. Bernanke tweeted a link to his new blog on economics, finance and "sometimes baseball" at the Brookings Institute: http://www.brookings.edu/blogs/ben-bernanke
While his Twitter account @benbernanke shows a June 2009 date joined, it appears to be the former Fed Chair's first tweet. When we first noticed and followed his twitter account this morning he had a mere 253 followers, now the account is up to 5,781.
In his inaugural blog, Bernanke contends that "monetary policy is 98 percent talk and only two percent action." He calls it a powerful tool but warns that downside of sending the wrong message can be high.
He followed it up with a new blog "Why are interest rates so low?" He said while the Fed gets the blame for low rates, this is true only in a very narrow sense. He said what matters most for the economy is the real, or inflation-adjusted, interest rate (the market, or nominal, interest rate minus the inflation rate). To help explain, he points to the concept of the equilibrium real interest rate, or sometimes called the Wicksellian interest rate. He said equilibrium interest rate "is the real interest rate consistent with full employment of labor and capital resources, perhaps after some period of adjustment."
He concludes that "the state of the economy, not the Fed, is the ultimate determinant of the sustainable level of real returns."
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