by Calculated Risk on 8/30/2012 03:51:00 PM

Fed Chairman Ben Bernanke is scheduled to speak on Friday at 10 AM ET at the Jackson Hole Economic Symposium.

From Jon Hilsenrath at the WSJ: Bernanke's Dilemma Over His Legacy

[W]hen the chairman speaks Friday morning at the central bank's annual retreat here, he must once again address whether there is more the Fed can do to get the economy going and whether it is worth taking chances on controversial new programs. All along he has argued these efforts are worth it and appears likely to stick to that line in his speech.

Beyond big issues of the moment—such as whether the Fed will launch a new bond-buying program—a broader question looms in Jackson Hole about Mr. Bernanke's legacy. Long after his term as chairman ends in 17 months, will he be remembered as the Fed chief who did too little to combat high unemployment or the one who did too much and unleashed inflation and financial instability with the actions he took? Critics make both arguments.

I'd like to think that Bernanke isn't thinking about his legacy, but that he is focused on what is best for the economy. So far the inflation critics have been wrong, and high inflation still seems very unlikely with a depressed economy, and significant resource slack.

More from Hilsenrath:

The Fed signaled strongly in the minutes of its August 1 policy meeting that in September it is likely to offer new assurances that interest rates will stay low beyond 2014 and that it is seriously considering more bond purchases. One issue Mr. Bernanke might clear up on Friday: Whether U.S. economic data since that meeting—some of it modestly stronger—has changed his outlook.

Goldman Sachs chief U.S. economist Jan Hatzius estimates that a $500 billion bond-buying program would boost growth by 0.2 percentage points for a year and bring down the unemployment rate by 0.1 percentage point.

Bernanke will not announce a new program at Jackson Hole. The most he will do is argue the Fed can do more and still has tools that will be effective - and he will probably say that help from fiscal authorities to provide more stimulus in the short term, and a credible long term plan to reduce the deficit, would be very helpful (good luck).

I think the key will be how he describes the economy and his view of growth prospects.