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Monetary and exchange rate policy in small open economies: the case of Iceland...,
2008-10-22 06:39:06
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bailout math...,
2008-10-25 09:03:48
credit bubbles:
I don't know how you could try to answer "How Did This Happen?" without mentioning the negative real interest rates during the bubble years, but it strikes me as liberally dishonest (nevermind the lack of any mention of the great deal of Democratic support for the policies it blames). That is, for a partisan and liberal organization (that thing is a CAP project, itself a product of the bubble) that is decidedly in favor of greater federal intervention, it is predictable that they would ignore the role played by the quasi-government agency that massively intervenes in the operations of the economy every second of every minute of every open market hour of every business day. Monetary policy, as such, is apparently fit for neither the "fact" nor the "myth" page.
Depending on the inflation numbers you use, real interest rates were negative for most or all of the time between 2002 and 2005, which so far as I understand is a historically unprecedented length of time to engage in a credit stimulus that was bound to create what is clearly a historically unprecedented credit bubble. And this was replicated by central banks around the globe.
And the central bank's response, of course, would be to do it again. It doesn't have any other options.
:: posted by buermann @ 2008-10-24 14:33:06 CST |
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