>Marta Russell wrote:
>>A while back there was discussion about Greenspan making some noise
>>about the fact that the U.S. could not remain an "oasis" in the middle
>>of the world economic mess. Does anyone have a source for that
>>statement?
I think he said it at a speech he gave in Berkeley last September that I went to, but I do not have the text handy...
Brad DeLong
Ah. Here it is: February 5, 1999 Wall Street Journal:
And here's the original:
<http://www.federalreserve.gov:80/BoardDocs/Speeches/1998/19980904.htm>
The first few grafs:
------------------------------------------------------------------------ Remarks by Chairman Alan Greenspan At the Haas Annual Business Faculty Research Dialogue, University of California, Berkeley, California September 4, 1998 Question: Is There a New Economy? The question posed for this lecture of whether there is a new economy reaches beyond the obvious: Our economy, of course, is changing everyday, and in that sense it is always "new." The deeper question is whether there has been a profound and fundamental alteration in the way our economy works that creates discontinuity from the past and promises a significantly higher path of growth than we have experienced in recent decades. The question has arisen because the economic performance of the United States in the past five years has in certain respects been unprecedented. Contrary to conventional wisdom and the detailed historic economic modeling on which it is based, it is most unusual for inflation to be falling this far into a business expansion. Many of the imbalances observed during the few times in the past that a business expansion has lasted more than seven years are largely absent today. To be sure, labor markets are unusually tight, and we should remain concerned that pressures in these markets could spill over to costs and prices. But, to date, they have not. Moreover, it is just not credible that the United States can remain an oasis of prosperity unaffected by a world that is experiencing greatly increased stress. Developments overseas have contributed to holding down prices and aggregate demand in the United States in the face of strong domestic spending. As dislocations abroad mount, feeding back on our financial markets, restraint is likely to intensify. In the spring and early summer, the Federal Open Market Committee was concerned that a rise in inflation was the primary threat to the continued expansion of the economy. By the time of the Committee's August meeting, the risks had become balanced, and the Committee will need to consider carefully the potential ramifications of ongoing developments since that meeting.