Monetary Policy of Bernanke

Ben Bernanke is current Chairmen of US Federal Reserve and his task is to ensure appropriate monetary insurance constitution in order to improve countrys economic and monetary performance. Bernanke argues he has to work closely with all members of the Committee because it is the only bureau to develop monetary form _or_ system of government in such a course that it would fit countrys needs and demands.Therefore, the paper discusses issues of monetary insurance offered by Bernanke as well as examines influence of globalisation on overall monetary policy of the country. Actually, Bernanke is concerned whether ongoing economic globalisation and integration refers US monetary policy. Monetary policy operate in financial and economic environment being strongly accepted by integration.Bernanke nones that monetary policy instead of stabilizing economic and financial situation in the country does little to drive powerful economic forces and to cause morphological changes in fallible for policy. Bernanke claims that if Federal Reserve wants to develop effective monetary policy, it should, firstly, be fully aware of all factors which are able to affect and restrain the overall economic growth, inflation and employments rates in the United States. moderate asserts that countrys economy should be open to other countries because nudeness plays crucial fictitious character in monetary policy affecting scathe stability and sustainable employment within country. Furthermore, economic openness too assists Federal Reserve in meeting congressional mandate.Bernanke cites analysts who argue that globalization puts obstacles to US monetary policy because it aims at reducing US interest rates of Federal Reserve and asset price. Also globalization diminishes the role of domestic factors affecting inflation process. Nevertheless, Bernanke doesnt support such judgment claiming that he is sure globalization should be implicated to increase military strength of mon etary policy. Globalization and Monetary Institute was established to study tinge of globalization no economy and policy of the country.Bernanke argues that monetary policy affects higher up all countrys financial conditions and asset prices and interest rates are under attack. Consequently, changes taken place in financial conditions would affect many households and firms, as well as would affect production, consumption and investing 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 pay more attention to financial stability by controlling federal silver and interest rates. Banks loans should be carefully considered as well. He recommends using open-market operations because due to policy of openness the Federal Reserve would be ab le to manage ceaseless supply of funds, inter-bank markets. Such policy will 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 strait-laced control over the federal funds rates because they strongly affect short-term dollar nominal interest rates.Bernanke promotes cooperation of the Federal Reserve with ultramodern central banks because it gives excellent opportunity to conduct monetary policy, to examine economic and financial data obtained from variety of markets, and to apply 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 developing economic models to guide policymakers and forecast techniques to ensure sustainable progress. Bernanke assumes that monetary po licymakers must therefore strike a difficult balance conducting rigorous analysis informed by live on economic theory and empirical methods while keeping an open spirit 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 Yield Curve and Monetary Policy. (2006, parade 20). Retrieved April 19, 2007, from http//economistsview.typepad.com/economistsview/2006/03/bernanke_the_yi.html