The stress on the financial system in the fall of 2007 was significant, but not so significant as to threaten the overall stability of the U.S. economy, although it did lead to the beginning of a recession at the end of 2007.

I was a professor at Princeton University. And, in that capacity, I studied for many years the role of financial crisis in the economy.

I got into economics because I wanted to make things better for the average person.

I came home from school one day, and there was a phone call for me. And I picked up the phone. They said, 'This is the Harvard Admissions Department. We'd like to let you know that you're accepted in the freshman class.' And I said, 'Come on, who is this really?'

The banks have accounts with the Fed, much the same way that you have an account in a commercial bank.

All the Federal Reserve can do is make loans against collateral.

A little humility never hurts.

Interest rates are used to achieve overall economic stability.

If you take a candy bar in the short run, it gives you a burst of energy, but after a while, it just makes you fat.

In a slow-growing world that is short on aggregate demand, Germany's trade surplus is a problem.

Actually, I'm a Republican.

To the extent that bank panics interfere with normal flows of credit, they may affect the performance of the real economy.

Long term, I have a lot of confidence in the United States. We have an excellent record in terms of innovation. We have great universities that are involved in technological change and progress. We have an entrepreneurial culture, much more than almost any other country.

The Fed's independence is critical.

Banks will have to win the confidence of their customers through fair dealing, making good loans, and remaining financially healthy.

China is growing very quickly and is clearly becoming an important player in the world economy.

The best solution to income inequality is providing a high-quality education for everybody. In our highly technological, globalized economy, people without education will not be able to improve their economic situation.

Income inequality is troubling because, among other things, it means that many people in our society don't have the opportunities to advance themselves.

If you're in a car crash, you're mostly involved in trying to not go off the bridge, and later on you say, 'Oh my God!'

Economics has many substantive areas of knowledge where there is agreement, but also contains areas of controversy. That's inescapable.

I think most of us would agree that people who have, say, little formal schooling but labor honestly and diligently to help feed, clothe, and educate their families are deserving of greater respect - and help, if necessary - than many people who are superficially more successful.

Remember that physical beauty is evolution's way of assuring us that the other person doesn't have too many intestinal parasites.

Honest error in the face of complex and possibly intractable problems is a far more important source of bad results than are bad motives.

If you are not happy with yourself, even the loftiest achievements won't bring you much satisfaction.