Money and Credit Features

  • Harold L. Vogel


William McChesney Martin Jr., Fed Chairman from 1951 to 1970, famously said that “Our purpose is to lean against the winds of deflation or inflation, whichever way they are blowing, but we do not make those winds.” The statement is by now a hoary part of central banking’s conventional wisdom but it is inaccurate and misleading. As this chapter illustrates, central banks are not inherently independent of politics, they tend to be more reactive than proactive in their policies, they aren’t always clear and transparent in signaling intentions, strategies, and goals, and they have a proclivity toward blowing bubbles and a reluctance to restrain them. They don’t like to play the villain. There’s no way to understand extreme market events without understanding central bank’s histories, motivations, and procedures.


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Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Harold L. Vogel
    • 1
  1. 1.New YorkUSA

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