Monetary Policy of Bernanke

Ben Bernanke is current Chairmen of US federal Reserve and his task is to train appropriate fiscal insurance in order to amend republics economic and financial performance. Bernanke argues he has to work closely with alone members of the Committee because it is the only way to take monetary policy in such a way that it would fit countrys unavoidably and demands.Therefore, the paper discusses issues of monetary policy offered by Bernanke as well as examines influence of internationalization on overall monetary policy of the country. Actually, Bernanke is raise whether ongoing economic globalization and integrating affects US monetary policy. monetary policy ope range in financial and economic environment being rightly affected by integration.Bernanke notes that monetary policy instead of stabilizing economic and financial situation in the country does little to drive powerful economic forces and to cause structural changes necessary for policy. Bernanke claims that if Federal Reserve wants to develop effective monetary policy, it should, firstly, be fully aw are of all factors which are able to affect and determine the overall economic growth, inflation and employments rates in the United States.Chairman asserts that countrys economic system should be open to other countries because openness plays crucial role in monetary policy affecting price stability and sustainable employment within country. Furthermore, economic openness also assists Federal Reserve in coming together congressional mandate.Bernanke cites analysts who argue that globalization puts obstacles to US monetary policy because it aims at reducing US stakes rates of Federal Reserve and summation price. Also globalization diminishes the role of domestic factors affecting inflation process. Nevertheless, Bernanke doesnt support such idea claiming that he is sure globalization should be implicated to increase effectiveness of monetary policy. Globalization and Monetary land was e stablished to study impact of globalization no economy and policy of the country.Bernanke argues that monetary policy affects above all countrys financial conditions and asset prices and interest rates are under attack. Consequently, changes taken regularise in financial conditions would affect many households and firms, as well as would affect production, consumption and investment opportunities. Thus, Bernanke states that the financial environment in which U.S. monetary policy is made has been irrevocably changed by the remarkable increases in the magnitudes of financial flows into and out of the United States. (Bernanke 2007)Therefore, he argues that he Federal Reserve should stand more attention to financial stability by controlling federal official monetary resource and interest rates. Banks loans should be carefully considered as well. He recommends exploitation open-market operations because due to policy of openness the Federal Reserve would be able to manage constant su pply of funds, inter-bank markets. Such policy leave alone keep federal funds close to the targeted rates and international integration of financial markets will not be affected or prevented. Further, Bernanke admits that the Federal Reserve should take proper control over the federal funds rates because they strongly affect short-term dollar nominal interest rates.Bernanke promotes cooperation of the Federal Reserve with modern central banks because it gives excellent opportunity to charter monetary policy, to examine economic and financial data obtained from variety of markets, and to take for those data when considering economy and inflation. Bernanke says it is necessary to seek for alternative courses of policy to improve effectiveness of monetary policy and macroeconomic performance of the country.He recommends growth economic models to guide policymakers and forecasting techniques to ensure sustainable progress. Bernanke assumes that monetary policymakers mustiness there fore strike a difficult balance conducting rigorous abstract informed by sound economic theory and empirical methods eon keeping an open mind about the many factors, including myriad global influences, at play in a dynamic modern economy like that of the United States. (Bernanke 2006)ReferencesBernanke, Ben. (2007, March 2). Globalization and Monetary Policy. Retrieved April 19, 2007, from http//www.federalreserve.gov/boarddocs/speeches/2007/20070302/Bernanke, Ben. (2006, February 15). Testimony of Chairmen Ben S. Bernanke. Retrieved April 19, 2007, from http//www.federalreserve.gov/boarddocs/hh/2006/february/testimony.htmBernanke The move over Curve and Monetary Policy. (2006, March 20). Retrieved April 19, 2007, from http//economistsview.typepad.com/economistsview/2006/03/bernanke_the_yi.html