David Beckworth has an extremely insightful blog post on the inconsistencies of Ben Bernanke’s views as an academic and as a central bank chief.
Anybody who have read the academic Ben Bernanke’s analysis of the Great Depression and particularly of Japan’s 1990s deflation will be stroke by how different his views are from Fed chairman Bernanke’s views. Bernanke obviously claims that he is not inconsistent. Furthermore, Bernanke claims that the situation in the US is very different from Japan in the 1990s. David on the other very clearly shows that Bernanke is indeed inconsistent and that the academic Bernanke would have realized that there are significant similarities between Japan in the 1990s and the US today.
David’s graph on Japanese and US demand deficiency shows it all. Have a look here.
I really have not much to add other than I think David is 100% right. The Federal Reserve is risking repeating the failures of the Bank of Japan if the Fed chairman keeps forgetting about the excellent research on Japan by the academic Ben Bernanke.
PS This discussion reminded me of one of my own earlier posts: Needed: Rooseveltian Resolve. The story is the same – I miss Ben Bernanke the academic.