Monetary Policy in the 2008-2009 Recession
2009; RELX Group (Netherlands); Linguagem: Inglês
ISSN
1556-5068
Autores Tópico(s)Economic, financial, and policy analysis
Resumorecession that began with a cyclical peak in December 2007 originated in a combination of real shocks because of a fall in housing wealth and a fall in real income from an increase in energy prices. most common explanation for the intensification of the recession that began in the late summer of 2008 is the propagation of these shocks through dysfunction in credit markets. alternative explanation offered in this article emphasizes propagation through contractionary monetary policy. first explanation stresses the importance of credit-market interventions (credit policy). second emphasizes the importance of money creation (money-creation policy). According to Federal Open Market Committee (FOMC) Chairman William McChesney Martin, The System should always be engaged in a ruthless examination of its past record (FOMC Minutes, 11/26/68, 1,456).
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