Unprecedented Actions: The Federal Reserve's Response to the Global Financial Crisis in Historical Perspective / Frederic S. Mishkin, Eugene N. White.

Format:

Book

Author/Creator:

Mishkin, Frederic S.

Contributor:

National Bureau of Economic Research.

White, Eugene N.

Series:

Working Paper Series (National Bureau of Economic Research) no. w20737.

NBER working paper series no. w20737

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Unprecedented Actions

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2014.

Summary:

Interventions by the Federal Reserve during the financial crisis of 2007-2009 were generally viewed as unprecedented and in violation of the rules--notably Bagehot's rule--that a central bank should follow to avoid the time-inconsistency problem and moral hazard. Reviewing the evidence for central banks' crisis management in the U.S., the U.K. and France from the late nineteenth century to the end of the twentieth century, we find that there were precedents for all of the unusual actions taken by the Fed. When these were successful interventions, they followed contingent and target rules that permitted pre-emptive actions to forestall worse crises but were combined with measures to mitigate moral hazard.

Notes:

Print version record

December 2014.