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The Monetary Origins Of The Economic And Financial Crisis

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  • Bernard LANDAIS

Abstract

The global economic situation suddenly worsened in the fall of 2008 and output expansion was negative almost everywhere for 2009. Fluctuation analysis has shown that most of the financial crises and recessions of the past were triggered and worsened by inadequate monetary policies. For our times, the monetary policy played a significant role in the development of the events through its responsibility in the outbreak of the financial crisis. All together, the monetary policy, especially the American one, can be blamed for the remote role (2002–2004) it played in the creation of the speculative bubble which led to a financial crisis. It also has a part of the responsibility through its restrictive direction during the 2004–2006 period; this time, a direction shared by other central banks. Finally, it is more immediately involved through its lack of clear–sightedness and responsiveness in the first months of the recession.

Suggested Citation

  • Bernard LANDAIS, 2010. "The Monetary Origins Of The Economic And Financial Crisis," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 5(3(13)/Fal), pages 280-291.
  • Handle: RePEc:ush:jaessh:v:5:y:2010:i:3(13)_fall2010:p:115
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    References listed on IDEAS

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    1. Daria Finocchiaro & Virginia Queijo Heideken, 2013. "Do Central Banks React to House Prices?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(8), pages 1659-1683, December.
    2. Robert L. Hetzel, 2009. "Monetary policy in the 2008-2009 recession," Economic Quarterly, Federal Reserve Bank of Richmond, issue Spr, pages 201-233.
    3. David C. Wheelock & Mark E. Wohar, 2009. "Can the term spread predict output growth and recessions? a survey of the literature," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 419-440.
    4. John B. Taylor, 2009. "The Financial Crisis and the Policy Responses: An Empirical Analysis of What Went Wrong," NBER Working Papers 14631, National Bureau of Economic Research, Inc.
    5. Lawrence H. White, 2009. "Federal Reserve Policy and the Housing Bubble," Cato Journal, Cato Journal, Cato Institute, vol. 29(1), pages 115-125, Winter.
    6. Stephen G. Cecchetti, 1997. "Understanding the Great Depression: Lessons for Current Policy," NBER Working Papers 6015, National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Landais, Bernard, 2011. "Conduite et efficacité de la politique économique : les leçons de la crise
      [Management and Efficiency of the Economic Policies : The Crisis' Lessons"]
      ," MPRA Paper 31223, University Library of Munich, Germany.
    2. Landais, Bernard, 2012. "Reformulation du modèle macroéconomique de la nouvelle synthèse : crédits, politique monétaire et écarts de taux
      [A reformulation of the new synthesis macroeconomic model : credits, monetary policy
      ," MPRA Paper 38665, University Library of Munich, Germany.

    More about this item

    Keywords

    monetary policy; interest spread; Taylor Rule; financial crisis; recession.;

    JEL classification:

    • E - Macroeconomics and Monetary Economics

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