Semi-Daily Journal Archive

The Blogspot archive of the weblog of J. Bradford DeLong, Professor of Economics and Chair of the PEIS major at U.C. Berkeley, a Research Associate of the National Bureau of Economic Research, and former Deputy Assistant Secretary of the U.S. Treasury.

Friday, August 25, 2006

Near-Real-Time Federal Reserve Conference Blogging

David Wessel and Greg Ip of the Wall Street Journal are blogging the Federal Reserve Bank of Kansas City's Jackson Hole conference:

David Wessel writes:

David Wessel: From Wausau to Wuhan via Jackson Hole: Much has been made about differences between the easy-to-understand public speaking style of Federal Reserve Chairman Ben S. Bernanke and his famously opaque predecessor Alan Greenspan. But in his speech this morning at the Federal Reserve Bank of Kansas City's Jackson Hole, Wyo., forum, Bernanke seems to be borrowing a Greenspan tactic, one Greenspan often used to avoid talking about interest rates: Pepper your speeches with obscure historical references and unusual metrics.

"When geographers study the earth and its features, distance is one of the basic measures they use to describe the patterns they observe," Bernanke said in the opening of his address on the benefits of globalization and current threats to it, the subject of the conference. "Distance is an elastic concept, however," he continued. "The physical distance along a great circle from Wausau, Wisconsin to Wuhan, China is fixed at 7,020 miles. But to an economist, the distance from Wausau to Wuhan can also be expressed in other metrics, such as the cost of shipping goods between the two cities, the time it takes for a message to travel those 7,020 miles, and the cost of sending and receiving the message. Economically relevant distances between Wausau and Wuhan may also depend on what trade economists refer to as the 'width of the border,' which reflects the extra costs of economic exchange imposed by factors such as tariff and nontariff barriers, as well as costs arising from differences in language, culture, legal traditions, and political systems."

Along the way, Bernanke also quotes Martin Luther, refers to Vasco da Gama and mentions the Napoleonic Wars. He does not, however, cite Greenspan's frequent observation that -- because of the value of ideas and miniaturization of technology -- a dollar's worth of gross domestic product weighs less than it used to.

Greg Ip writes:

Bernanke’s knowledge of economic history was on ample display in his opening remarks Friday to the Fed’s Jackson Hole symposium, “Global Economic Integration: What’s News, What’s Not.” In particular, he draws chuckles by quoting one German observer’s protests that importing from Asia makes Asians rich while impoverishing Germany. The observer? Martin Luther, in 1524. (Bernanke credits his former colleague and co-author, Princeton’s Harold James, for the quote.)

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