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From maestro to villain of modern monetary policy: a critical assessment of the 'Greenspan put' as the main cause of the global crisis


  • Emiliano Brancaccio

    () (University of Sannio)

  • Giuseppe Fontana

    () (University of Sannio and University of Leeds)


This paper discusses the conventional view that the main cause of the current crisis is the accommodative monetary policy followed by Greenspan’s Fed in the early 2000s. It assesses the merits and the drawbacks of this view by looking at the close relationship between the role of monetary policy in modern economies, and its theoretical frame of reference, namely the New Consensus Macroeconomics (ncm) model. The paper concludes that there is little evidence that the monetary policies in the early 2000s are the cause of the credit and house bubbles, which have then led to the financial crisis.

Suggested Citation

  • Emiliano Brancaccio & Giuseppe Fontana, 2011. "From maestro to villain of modern monetary policy: a critical assessment of the 'Greenspan put' as the main cause of the global crisis," History of Economic Ideas, Fabrizio Serra Editore, Pisa - Roma, vol. 19(2), pages 131-146.
  • Handle: RePEc:hid:journl:v:19:y:2011:2:7:p:131-146

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