The Road Ahead for the Fed (Hoover Institution Press Publication) [Hardcover]

John D. Ciorciari (Editor), John B. Taylor (Editor)

Book Description

Publication Date: July 17, 2009 | ISBN-10: 081795001X | ISBN-13: 978-0817950019 | Edition: 1st

The Federal Reserve is the single most important economic policy institution in the United States. Its recent unprecedented actions and interventions have raised serious concerns in many quarters about inflation, as well as the independence and effectiveness of the Fed. In The Road Ahead for the Fed, twelve expert authors examine the recent actions of the Federal Reserve and debate key issues on how it can best navigate the road ahead.

The authors suggest directions for the Fed going forward by drawing on principles from politics, history, and the market. They then explain how the Fed decided to establish a number of large and extraordinary new programs and offer practical suggestions on how to exit. They also recommend a number of policy reforms to address risk in the financial system and reduce the need for crisis-driven intervention. Although they offer a range of views, they concur on the need for both market-based mechanisms and regulatory reforms to keep the Fed on the road to good monetary policy in the future.

Edited by John D. Ciorciari and John B. Taylor

Editorial Reviews

Review

A broken financial system; a great recession; enormous challenges for The Federal Reserve. Financial institutions, the markets and the Fed itself will never be quite the same. John Taylor and John Ciorciari have brought together a highly knowledgeable and experienced group to analyze the issues and make useful and provocative proposals. The Road Ahead for the Fed couldn't be more timely. ---Paul A. Volcker, Former Chairman of the Federal Reserve Board Chairman of the President's Economic Recovery Advisory Board

With so much at stake for the Fed and the world's financial markets, this timely and thoughtful book is a must read. Twelve leading experts critically analyze and candidly debate the most crucial issues facing the Fed, from the need for an exit strategy to incentive-based market reforms. Economic policy makers should take their ideas and recommendations under advisement. Mickey D. Levy, Chief Economist, Bank of America

This is a book both to read and to keep on your bookshelf. You will find essays here that will make you smile in agreement and shake your head in disagreement, perhaps both, for the authors are not only smart, but opinionated. But this is a distinguished group, and their opinions are very well-informed, very much worth reading, and very timely. Alan S. Blinder, Former Vice-Chairman of the Federal Reserve Board Professor of Economics at Princeton University

About the Author

John B. Taylor is the Bowen H. and Janice Arthur McCoy Senior Fellow at the Hoover Institution and the Mary and Robert Raymond Professor of Economics at Stanford University.

John D. Ciorciari is an assistant professor at the Gerald R. Ford School of Public Policy at the University of Michigan.

Product Details

• Hardcover: 225 pages
• Publisher: Hoover Institution Press; 1st edition (July 17, 2009)
• Language: English
• ISBN-10: 081795001X
• ISBN-13: 978-0817950019
• Product Dimensions: 5.6 x 0.8 x 8.2 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 3.0 out of 5 stars  See all reviews (2 customer reviews)
• Amazon Best Sellers Rank: #1,312,658 in Books (See Top 100 in Books)

Most Helpful Customer Reviews

5 of 5 people found the following review helpful

4.0 out of 5 stars Twelve Experts Explore the Fed's Actions During the Financial Crisis - Deserves to be Read - 4 Stars December 9, 2010

By A Customer TOP 1000 REVIEWERVINE™ VOICE

Format:Hardcover|Amazon Verified Purchase

This book is an interesting concept and will be read by the intelligentsia of this country. Too many people and that means most of us are dependent upon reading newspapers, and watching television to understand the origins of the financial crisis during 2008/ 2009. Reporters simply parrot back what they are told. They possess no capacity to synthesize the vital information on which the vast majority of us will make decisions to support, or not support the programs that the Fed is putting forward.

The men in this book know what they are talking about to the extent that anyone can, when dealing with extremely complex macroeconomic interventions in uncharted territories.

Here are a few of the minds that are exploring the financial crisis and its aftermath in this book:

* George P. Shultz
Is there anyone more on top of his game than Shultz, educated at Princeton, with a PhD from MIT? He is a former Secretary of the Treasury and a former president of Bechtel Corporation. His recommendation is for all of us to think long-term because we are missing the big picture. Short term actions are having unintended long term effects that have to be anticipated.

* Allan Meltzer
Meltzer is probably America's foremost historian of the Fed. His volume II, History of the Federal Reserve was just released. In his essay in this book, he argues for a return to proven policies to attack our current situation.

* Donald Kohn
Former Vice-Chairman of the Board of Governors of the Federal Reserve System, in his essay talks about how the Fed operates from the inside, and in particular deals with the systemic risks that the Fed is trying to deal with.

* James D. Hamilton
With a doctorate from UC Berkeley he uses charts to lay out the Fed's balance sheet in detail. He shows you the precise concerns regarding inflation, and the potential loss of independence by the Fed.

* Myron Scholes
One of the authors of the Black-Scholes equations for options and derivative pricing, in this essay he argues for using market based mechanisms in an attempt to reduce systemic risk.

There are seven more experts who are writing essays. They are not all that difficult to read although it is expected that academics working at this level intentionally make themselves difficult to understand, so that they can deny ever saying anything. There are 205 pages of narrative, and it is my opinion that the most interesting part is the last chapter where the editor of the book John Ciorciari does a summary, and effectively argues for key principles and proposes recommendations. These include:

A) Dealing with Moral Hazard and the concept of Too Big to Fail

B) Transparency Improvements

C) Reforms of the Market and Regulations

D) Strengthening the Ratings Agency Concept

E) Capital Standards Enforcement

F) Derivatives Markets Improvements

G) Housing Finance Reforms

H) Bankruptcy Law Reforms

I) What to do with the Firms that FAIL

CONCLUSION:

As informed citizens of our Republic, we need to take control of these issues for ourselves, and not leave them in the hands of the academics, and the media. In order to do that we have to become better informed? Reading this book is a way to achieve that goal. I urge you if you want to understand the situation we got ourselves into, and the potential roads out of it, to read through a book like this. Thank you for reading this review.

Richard C. Stoyeck

8 of 12 people found the following review helpful

2.0 out of 5 stars A Blind Alley January 16, 2010

By Linksman

Format:Hardcover|Amazon Verified Purchase

I must be the only person who bought this book, since nobody else has yet reviewed it. Actually, it is not a book, but a series of speeches and casual ruminations on events now more than a year old. Perhaps some publisher saw a chance to cash in on a few small ideas from some big names. This wouldn't be the first time.

This is not to say the book doesn't contain an isolated intelligent paragraph here and there, but you will find better value free on the web. You can get the stuff in this book any day on the editorial page of the WSJ.