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After Greenspan wrote in Financial Times “We will never have a perfect model of risk“, leading economists (Dr. Hudson, ECRI, etc) posted their responses.
It's fascinating series of posted responses, especially the comments from ECRI's Lakshman Achuthan and Anirvan Banerji co-founders of the (Economic Cycle Research Institute) in New York , since they have an excellent reputation for forecasting economic trends.
From site: "In this forum, some of the world's leading economists debate issues raised in FT columns."
First, in this forum, on April 6 Greespans posts a reply (defense?) to criticisms of his above March 17 article. Then other leading economists post their response to Greenspan's April 6 comments .
Excerpts from ECRI's posted comments, who say Fed and U.S. Gov't acted too slow:
"Yet, ECRI’s forward-looking Future Inflation Gauge, a measure of underlying inflation pressures whose track record has been highlighted by independent analysts , was already in a cyclical downswing last summer. The Fed had a green light to slash rates that it failed to heed."
"Policymakers seemed to get the urgency. In January, Treasury secretary Hank Paulson declared that “time is of the essence”, House Speaker Nancy Pelosi spoke of “timely, targeted and temporary” stimulus, and the Administration and Congress enacted a tax rebate package with exemplary speed – but designed it to reach consumers several months later! It was as if the medics had arrived and taken a quick decision to administer CPR – in a few months."
Excerpt from Dr. Hudon's post:
"First, Mr Greenspan uses a false logic when he argues that private bankers know the financial marketplace better than regulators, because they’re there on the spot. No doubt this is true. But Mr. Greenspan argues as if it follows that they should regulate themselves, as if they did NOT know there was a bubble."
http://blogs.ft.com/wolfforum/2008/0.../#comment-9125
It's fascinating series of posted responses, especially the comments from ECRI's Lakshman Achuthan and Anirvan Banerji co-founders of the (Economic Cycle Research Institute) in New York , since they have an excellent reputation for forecasting economic trends.
From site: "In this forum, some of the world's leading economists debate issues raised in FT columns."
First, in this forum, on April 6 Greespans posts a reply (defense?) to criticisms of his above March 17 article. Then other leading economists post their response to Greenspan's April 6 comments .
Excerpts from ECRI's posted comments, who say Fed and U.S. Gov't acted too slow:
"Yet, ECRI’s forward-looking Future Inflation Gauge, a measure of underlying inflation pressures whose track record has been highlighted by independent analysts , was already in a cyclical downswing last summer. The Fed had a green light to slash rates that it failed to heed."
"Policymakers seemed to get the urgency. In January, Treasury secretary Hank Paulson declared that “time is of the essence”, House Speaker Nancy Pelosi spoke of “timely, targeted and temporary” stimulus, and the Administration and Congress enacted a tax rebate package with exemplary speed – but designed it to reach consumers several months later! It was as if the medics had arrived and taken a quick decision to administer CPR – in a few months."
Excerpt from Dr. Hudon's post:
"First, Mr Greenspan uses a false logic when he argues that private bankers know the financial marketplace better than regulators, because they’re there on the spot. No doubt this is true. But Mr. Greenspan argues as if it follows that they should regulate themselves, as if they did NOT know there was a bubble."
http://blogs.ft.com/wolfforum/2008/0.../#comment-9125