Central banks debate limits of power in Wyo

JACKSON HOLE, Wyo - Central bankers who traveled to the wilds of Wyoming to figure out if more policy action was needed to curb stubbornly high unemployment heard powerful arguments on both sides of the debate, and leave with many questions unanswered.

Policymakers in Europe and the United States facing weak growth and painfully high unemployment are struggling with the issue of whether additional monetary stimulus could do more harm than good.

As the annual Jackson Hole gathering came to a close on Saturday and some of the world's most important central bankers headed back home, a former vice chairman of the US Federal Reserve summed up the key issue confronting the prestigious policy retreat.

"What is holding the economy back? Why is it that we've had such incredibly accommodative monetary policy for so long (but) we've had so little growth? I think it remains a puzzle," said Donald Kohn, who is now a senior fellow at the Brookings Institution think tank in Washington.

Fed Chairman Ben Bernanke, citing "grave" concerns about stagnation in the labor market in remarks that were seen as advancing the case for another round of bond purchases by the US central bank, talked about headwinds obstructing a recovery that included the debt crisis in Europe and US fiscal policy.