Thursday, March 29, 2007

Analysing the business cycle

Central banks pay very careful attention to the business cycle. If they believe that the economy is going to slow, then they can reduce interest rates to stimulate aggregate demand.

Yesterday, Ben Bernanke, the Federal Reserve Chairman, made some comments on the current state of the US economy that shed light on the difficulties in figuring out exactly what is going on in the US economy. Here, with some excellent commentary from James Hamilton is a synopsis of what he said....

No comments: