Let me just start this blog off by saying I like Alan Greenspan. A lot. I aspire to be a tenth of the Economist he has proven himself to be and if I could become anything in the world it would be Chairwoman of the Federal Reserve (shoot for the moon and land among the stars right?). So, I really like this particular cartoon. It also pertained to something I learned in Monetary Economics: The “just do it strategy”. Alan Greespan’s reign in the 1990’s was deemed wildly successful for its ability to maintain low and stable inflation (around 2%). The "just do it" strategy is having a target but no particular nominal anchor (unlike monetarism, inflation, or interest rate targeting). This type of strategy relies heavily on forward-looking behavior and pre-emptive strikes based on expectation, among other markers.
Although Greenspan achieved success with this type of approach, there are two disadvantages: (1) it is non-transparent and lacks accountability of the central bank (the Fed) and (2) its success relies upon those in charge of monetary policy (can those in charge successfully identify future movements in the economy and act accordingly?).
Will Ben Bernanke be successful in his “preemptive strikes” should he choose to follow in Greenspan’s footsteps? I’m not one to say for certain at this point, but I will say this: I like Ben Bernanke too.
Nike wasn't the only one "just doing it",
Your aspiring Economist
Post-script: Frederick Mishkin and the “Just do It” strategy:
http://www.nber.org/reporter/winter02/mishkin.html
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