Can Bernanke beat the Bear?

Ben Bernanke believes that central banks can protect the economy from the effects of a stock market collapse. But can his - or indeed any - policies succeed?

The US Federal Reserve once again slashed interest rates on Wednesday. Frank Shostak takes a closer look at the impact monetary policy has on economic activity - and why Ben Bernanke's policy of transparency is making things even worse. (First published 30/1/08)

Last Tuesday, January 22, 2008, the US central bank lowered its federal funds rate target by a hefty 0.75% to 3.5%. The panicky decision to lower the fed funds rate target was made ahead of the Fed's meeting at the end of this month. Last Tuesday's cut by the Fed was the largest nonscheduled interest-rate cut in more than 20 years.

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