His contributions include creating a monetary standard, forming the foundation of our banking system, and establishing the creditworthiness of our young nation. This Economic Commentary describes the debt our nation's financial strength owes to Hamilton. This revolution has also helped to reshape the way economic policy is being conducted here and around the world. In a recent speech in Cleveland, Roger W. Ferguson, Jr., vice chairman of the Federal Reserve Board of Governors, discussed Ohio's economic recovery and the role of economic policy in a communications era. This Economic Commentary is adapted from his talk at the City Club of Cleveland's Ameritech Power of Ideas 2000 Millenium Conference series on May 11.
Confidence is high and investors are looking forward to continued above-average returns.
In this Economic Commentary, we attempt to reconcile investors' expectations with a decline in the equity premium, using a standard approach to stock-price valuation. Federal deposit insurance protects the savings of small depositors, but it increases the likelihood that banks will take risks they otherwise would not have. While such an increase may put smaller banks on a level playing field with larger ones, it exceeds the amount necessary to protect small savers and is unfair to taxpayers. If you buy a lottery ticket, you usually wait to see if you've won before going on a spending spree. This Economic Commentary explains why we ought to be just as careful about spending projected federal budget surpluses.