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

It’s not a straightforward thing to calculate in some sense. The world does seem to have two engines instead of one. That is to say, we would argue strongly that the global experience in the late 1990s would not provide a clear, accurate benchmark for what we would think today. China, in particular, has reached a status and an independence from the United States that wasn’t present in the 1990s, and to the extent that it has achieved a certain dynamic in domestic demand, in a reorientation of production in Asia that has very closely linked those economies with China, the Chinese economy has, if you will, a momentum or a dynamic to it that is not totally dependent on the United States and so could, indeed, continue to grow rapidly if the U.S. economy were to slow.

Nonetheless, forecasting what will happen is a bit more of an art than a science because to some degree, for example, investment in these economies, while it is measured as a component of domestic demand, is undertaken with an eye toward export sales. So the interactions of consumer confidence, of prospects for exports, and of relative price changes that shift the terms of trade for some of these economies all have to be factored into the projection, and I’m sure we don’t get it precisely right by any means. But I would just say that, at the present time, the extent to which other sources of strength are arising in different parts of the global economy is, we think, an accurate representation, say, in comparison with ten years ago.

Keyboard shortcuts

j previous speech k next speech