21st Century Monetary Policy: The Federal Reserve from the Great Inflation to Covid-19

Federal Reserve leaders cope with soaring prices and collapsing economies in this penetrating history of America’s central bank since the mid-1960s. Bernanke (The Courage to Act), Federal Reserve chairman from 2006 to 2014, recaps chairman Paul Volcker’s quashing of the 1970s’ inflationary spiral with tight monetary policies that caused a deep recession; his own innovations during the 2008–2009 Great Recession, when he pioneered “quantitative easing” measures that bought up financial assets on a colossal scale; and current chairman Jay Powell’s heroics in resisting President Donald Trump’s political demands and implementing radical programs of lending and asset purchases during the 2020 Covid-19 crisis. Along the way, Bernanke shows how central banking doctrine shifted in debates over why interest rates declined and whether low inflation and low unemployment are compatible, and mulls monetary novelties like Bitcoin (don’t bank on it, he concludes). Bernanke delivers some tart commentary—he calls Republican attacks on his programs “scorched-earth right-wing partisanship”—but mainly sticks to the policy making, writing in marvelously lucid prose that explains complex economic issues in plain English. Suffused with high-stakes drama and clear thinking, this is one of the best accounts yet of the Fed’s tumultuous recent past. (May)