Federal Reserve Chairman Ben Bernanke says the US economy still lacks enough spending and investment to sustain its recent gains.
Washington: Federal Reserve Chairman Ben Bernanke says the US economy still lacks enough spending and investment to sustain its recent gains.
Bernanke says consumer demand remains weak relative to its level before the Great Recession. He notes that other contributors to economic growth - including borrowing and trade - have declined.
Ben Bernanke said the slow recovery from the Great Recession and 2008 financial crisis illustrates how vulnerable the global economy is, while urging economic policymakers to learn from that lesson.
The Federal Reserve chairman noted the extraordinary steps taken by the Federal Reserve and other central banks around the world to stabilize financial systems, during a two-day conference Friday on the crisis
The Fed purchased more than $2 trillion in bonds to try and push long-term interest rates lower. The effort was aimed at encouraging lending and borrowing. The Fed has been criticized for those purchases, but Bernanke has defended them as a successful effort that guarded against an even more severe downturn.
Bernanke said academic research that is being conducted now would help central banks respond to future crises.
``This outpouring of research will help shape future central bank doctrine and policy approaches and, most importantly, should help central banks better carry out their missions to promote the public welfare,'' Bernanke said at the opening of the conference.
His comments provide further insight into the reasoning behind the Fed's plan to hold short-term interest rates near zero through 2014. The central bank has stuck with that timetable despite three months of strong job growth and other signs of economic improvement.
Bernanke made the remarks during the second of four lectures he is giving to George Washington University students this month.