I would have to disagree with the views of Mr. Bernanke. The Fed reserve under Greenspan was one of the primary reasons for the housing bubble, interest rates were systematically reduced leading up to 2007 even though housing prices were trending way above historical norms. The Fed ignores all signs of asset inflation and instead only focuses on price inflation which are two very different things. It's primarily asset inflation (bubbles) which lead to economic recessions and financial difficulties and not price deflation which is a boon to consumers, savers, etc. (technology is price deflationary)
The Fed is particularly skilled in blowing asset bubbles which some would argue we are in again for both bonds and equities.
I’d say economics is more of an art than a science, especially when considering that the Krugman’s of the world ignore banks and money in their economic models. There’s a big contrasts in how some central banks operate around the world, take the US Federal reserve, they state that bubbles cannot be spotted but in other places such as New Zealand, they watch for bubbles and take action to prevent them from getting out of hand.
See below for some counter arguments to Mr.Bernanke’s recent post.
http://globaleconomicanalysis.blogspot.ca/2015/03/ben-bernanke-confused-as-ever-starts.html Just providing some additional view points.
