Students Comment on Coffee and Conversation with Ben Bernanke

Monday, Nov 2, 2015
by Rachel Estrada Ryan

On October 19, Undergraduate Associates of The Julis-Rabinowitz Center for Public Policy and Finance joined Bendheim Undergraduate Certificate in Finance juniors and seniors in welcoming former Federal Reserve Chair Ben Bernanke to campus during an informal “Coffee and Conversation” event.  

Bernanke’s visit concluded with his delivery of the Bendheim Center's 2015 Princeton Lecture in Finance in McCosh Hall the following afternoon.

Twelve JRCPPF associates attended the breakfast, and many were moved to comment on its impact.

Sophomore Vishan Nigam was impressed with Bernanke’s candor and unpretentiousness: “It’s remarkable how humble he is given how long he was in a position of so much influence,” he remarked. “At one point he talked about coordinating an interest rate cut with five other central banks in 2008, something that basically saved the world economy from an even deeper recession—and yet he acted like it was just a normal piece of business."

Senior Joseph Atlas is a member of Princeton University’s College Fed Challenge team, and enjoyed the unique opportunity to interact with Bernanke as the team participates in this year’s competition. “We on the Fed Challenge team are interested in figuring out whether the risks of delaying a rate hike outweighs the risks that inflation forecasts are incorrect,” he said. “Dr. Bernanke’s advice was valuable in thinking about tradeoff.”

From the BCF website

"A full day of interactive Q&A sessions at the Bendheim Center kicked off with coffee and conversation with 40 Certificate in finance juniors and seniors representing a range of majors. After students introduced themselves and their areas of research focus, Bernanke noted that he was pleased to see finance as a tool being used across such a wide range of disciplines and interests.

Undergrad questions then ranged from such topics as negative interest rates to the devaluation of Chinese currency. When asked whether quantitative easing (QE) by the Fed exacerbated income inequality by raising asset prices, Bernanke disagreed, noting that QE had the positive impact of creating jobs. 

Was GDP growth was as strong as he would like? Bernanke replied no, but noted that unemployment was improving faster than expected.

Students brought up prospects for inflation, questions about asset purchases, and whether politics was a barrier to recovery. Yes, Bernanke noted, although Dodd-Frank was passed which was a political victory. Democracy is a comparably messy thing, in comparison with academia, he noted,

One student raised the questions of capital formation through high yield debt, and whether buybacks and M&A are a productive use of capital. Others raised questions surrounding the Eurozone and whether a single currency has been a good thing or a bad for the EU.

Finance is an art, not a science, Bernanke concluded, responding to how he would have changed the response of the Fed with the benefit of hindsight.”

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