The New Economic Thought of Ben Bernanke
University of Redlands
School Of Business
Masters of Business Administration
Is laissez-faire dead?
The New Economic Thought of Ben Bernanke
By
Eyitejumade A. Sogbesan
Abstract
The Feds failure to recognize an economy moving towards the choke-hold of a recession due to the immense pressures from the credit bubble, increase in number of mortgage foreclosure, the weak exchange rate of the US dollar and the higher crude oil trading might be the “invisible hand” that Adam Smith predicted to guide the economy back to its cradles afterall. Rather than the Feds, to stem the rising inflation continues to cut key interest rates in order to stabilize the economy from an impending doom called “the recession”.
According to the National Bureau of Economic Research, the agency now officially defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months”. From history a recession is defined as two consecutive quarters of declines in gross domestic product. An example is reminiscent of the stock market crash in the early 1930s that not only brought America to her feet but also has the whole of Europe following suit.
For someone like Bernanke, he has to choose between two evils. My report aims to shed some lights on the intentions of Bernanke, by contrasting the economic thoughts of early century philosophers with the man at the helms at the peak bank of the world’s freest economy. Proponents of free market economy knows exactly that laissez faire should be followed to the core, Laissez-faire which literally mean, "let [it] function" is the economic doctrine founded by Quesnay and the early Physiocrats and expounded by Adam Smith, which stresses absolute zero governmental interference in the operations of the market economy. (Heilbroner, 1953)
In my report, I compared the metamorphosis of different economic thoughts from the philosophies of Adam Smith to that of Stiglitz, Keynes, Leacock and the man
School Of Business
Masters of Business Administration
Is laissez-faire dead?
The New Economic Thought of Ben Bernanke
By
Eyitejumade A. Sogbesan
Abstract
The Feds failure to recognize an economy moving towards the choke-hold of a recession due to the immense pressures from the credit bubble, increase in number of mortgage foreclosure, the weak exchange rate of the US dollar and the higher crude oil trading might be the “invisible hand” that Adam Smith predicted to guide the economy back to its cradles afterall. Rather than the Feds, to stem the rising inflation continues to cut key interest rates in order to stabilize the economy from an impending doom called “the recession”.
According to the National Bureau of Economic Research, the agency now officially defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months”. From history a recession is defined as two consecutive quarters of declines in gross domestic product. An example is reminiscent of the stock market crash in the early 1930s that not only brought America to her feet but also has the whole of Europe following suit.
For someone like Bernanke, he has to choose between two evils. My report aims to shed some lights on the intentions of Bernanke, by contrasting the economic thoughts of early century philosophers with the man at the helms at the peak bank of the world’s freest economy. Proponents of free market economy knows exactly that laissez faire should be followed to the core, Laissez-faire which literally mean, "let [it] function" is the economic doctrine founded by Quesnay and the early Physiocrats and expounded by Adam Smith, which stresses absolute zero governmental interference in the operations of the market economy. (Heilbroner, 1953)
In my report, I compared the metamorphosis of different economic thoughts from the philosophies of Adam Smith to that of Stiglitz, Keynes, Leacock and the man
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