Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.

Well, I don’t know that we have enough detailed information to speak definitively to the question of whether some capacity constraints were reached. We do see the slowdown occurring, importantly, in the sector of fixed investment. That is, the GDP numbers themselves do not give us real component information, but other measures of investment did turn down in the third quarter in a way that’s consistent with seeing GDP slow. The timing of the latest round of administrative measures suggests to us that we are seeing some effect from those. I don’t know that I would call it monetary policy exactly, but I think the bundle of moral suasion and, to some degree, real actions that, in and of themselves, have some bite contributed to this. After two quarters of what we infer from manipulating the numbers as very strong growth, is it possible that in some particular places capacity constraints are reached? It certainly could have been the case.

From our attempt to turn the series into quarter-to-quarter changes rather than the data that are announced, we certainly had higher numbers for the first half of this year than were generally talked about. The released numbers were tens and so forth, and we had twelves. Similarly, as a consequence we had a much greater slowdown than the released numbers, and we could be exaggerating both. Possibly it wasn’t really quite as strong as we thought in the first half, and it may not have slowed quite as much as we saw in the third quarter. But it would be a real gamble on our part to conclude that it wasn’t, at least in some important sense, due to the administrative measures that they took. I don’t think the officials are so unable to have a consequence with their policy tools, such as they are, if they are really determined—and they certainly seemed to be determined. Thus I would attribute much of the figure to the administrative measures, but we can’t rule out some capacity constraints here and there.

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