Alan Greenspan :: Essays Papers

Alan GreenspanSince Alan Greenspan became chair patch of the FED, the coun provides economy has reflected many positive results. He has done a terrific job. Allan is a actually bright man who is always conceive ofing of ways to prevent problems before they happen in the economic sector of the nation. All economists have been very content with his job just until now. In a recent Time magazine article called Is That Really You, Allan?disapproval about some novel rules that this man has suggested for the economy have been highly critized.The first new rule that Alan proposed was to keep down with producivity. In the article he responds to this new rule by formulation that too much efficiency pushes demand and becomes inflationary. This meaning that too much is produced and stock prices are getting higher. When this happens people begin to feel very flush and start to buy and buy like crazy. This is something that can cause major inflation in a future. Alans second rule is to keep s tock merchandise prices not rising more than 5% to 6%. Greenspan comments that this has to be done because shares should rise only as fast as the rest of the economy. These two new rules proposed by Alan are mainly to protect the country from inflation and many economists and other people dont understand it. The article also reflects that many people think that Alan is doing the wrong thing. This is mainly because they are not getting the economic benefits they wish and are not thinking about the countrys economic future. A very go by example is given in this article as well. The chief economist of the Deutsche Bank, Edward Yardeni states that, If the wealth effect continues to rise demand, then why cant productivity continue to boost supply? I really think that this comment was really said in an angry and ambitious way. This is an economist of a bank and should really try to understand that what Alan is trying to do is right. I also think this man is seeking only his own benefit s.The chairmans decisions have brought many investors to worry. But just as Edward Yardeni, all these people are only thinking about the harm these rules will bring to their own selves. They are not aware that what Alan is doing is taking precautions so inflation will not invade the economy in the coming years.