As the apparent incoming head of the Federal Reserve Board, Dr. Ben Bernanke has a tough act to follow. Chairman Greenspan has been perhaps the most successful Fed chairman in history, with inflation remaining calm and with only two mild recessions in 18 years. On the positive side, the incoming chairman inherits an economy that is stable, with low inflation and solid growth. But the problems and imbalances he must deal with are big.
First on the central bank's agenda is always inflation, and the sharp rise in energy prices and construction cost increases caused by the rebuilding of New Orleans has brought that to the fore again. In his academic...
