Bernanke looks at how central banks should cope with risks from bubbles and loose policy.
Bernanke is a blogging machine and today he looks at financial stability risks and said they must be taken "extremely seriously" but that monetary policy is a blunt tool.
Unfortunately, he's not covering any new ground here:
"I have argued that it's better to rely on targeted measures to promote financial stability, such as financial regulation and supervision, rather than on monetary policy," he writes.
He looks at some new research that confirms his case but also notes that if some assumptions are changed and a financial crisis is assumed to lead to Depression-like outcomes then keeping rates a bit higher passes the cost-benefit analysis.
