I said, “Tim, that’s a great job. I really like you, I’d love to work with you, but what do I do the 39 other hours of the week besides advise you?” And then a couple of weeks or months later, I can’t remember exactly how long it was, he called up again and said, “Well, how would you like to come to the New York Fed and run the Markets Group?” Markets Group at the time had about 230 employees. They executed monetary policy for the 14 / 15  BIS central bankers' speeches  Federal Reserve Bank of New York. I wasn’t sure I was going to have any time to talk to Tim Geithner in that role. And so I said yes immediately. Dr. Olajide Oladipo: You have a question? Are you a student? Audience Member: Yes, I am. Dr. Olajide Oladipo: Thank you. Audience Member: I am a student. Thank you so much for taking the time and speaking to us. My question was, being from a younger generation, I’m definitely interested in investing, but what would be your biggest piece of advice. Especially for us, the younger generation, with a limited budget, what would you – how should we go about it? President Dudley: Well, I don’t think I’ve ever been asked for investing advice before now. It’s probably not appropriate for the Federal Reserve to give out investing advice. I think the first thing is you want to get knowledgeable.
This mechanism amplified the immediate effect of public spending on aggregate demand. Monetary policy – in charge of credit conditions – was entrusted with the task of alleviating, through a careful policy of accommodation, the impact that government borrowing  BIS central bankers’ speeches  3  would have exerted on the cost of private debt. The central bank was financing the Treasury by creating money. Under these conditions, an increase in public spending could “add demand”– where this would be lacking for the goal of full employment – without taking away resources from other uses. Since then, the theory of economic policy has followed two paths that have led it to invert the ranking of relative potential of tools and to enhance the definition and measurement of the objective. As for the instruments, a different theory of the formation of expectations – no longer extrapolative – has highlighted the strong impact of monetary policy and has weakened the expected effects of fiscal policy. In the models that we use today, agents, when formulating their expectations, are attentive to the sustainability conditions of the choices in the long term. Economic policies deemed unsustainable in the long run are ineffective. For example, an active deficit-financed fiscal policy is limited by fears about the government’s ability to refinance the debt from which that policy originates. These fears may lead to behaviours that weaken the private sector – or, at worst, completely neutralise – the impact of public spending as a means of controlling demand.