Well, the tagline of this blog is: ‘Only questions; no answers’. That is the line that the Fed chair took when she made a speech at the Federal Reserve Bank of Boston about two weeks ago. There were some nineteen questions in her speech.
Most of the questions she poses have answers. Perhaps, posing the questions was an indirect acknowledgement of the answers that are out there and that are different from conventional wisdom.
Despite posing some seemingly challenging questions to conventional wisdom, she has scrupulously avoided asking obvious questions:
Do firms really respond to ultra-low interest rates by borrowing to invest? She touches upon this very remotely.
Does spillover on emerging economies occur through capital flows simply because uncovered interest parity does not hold for a meaningful period?
None of the comprehensive list of references are to any paper by Raghuram Rajan, William White, Claudio Borio, Stephen Cecchetti and BIS that have posed these questions and provided their answers.
The inescapable conclusion is that the posing of questions is a symbolic exercise and an end in itself but not the means to the end of seeking and accepting better answers.
Perhaps, I am being too cynical.