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The monetary origins of the financial and economic crisis

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  • Landais, Bernard

Abstract

Abstract 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

  • Landais, Bernard, 2010. "The monetary origins of the financial and economic crisis," MPRA Paper 23769, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:23769
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    File URL: https://mpra.ub.uni-muenchen.de/23769/1/MPRA_paper_23769.pdf
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    References listed on IDEAS

    as
    1. Tobias Adrian & Arturo Estrella & Hyun Song Shin, 2010. "Monetary cycles, financial cycles, and the business cycle," Staff Reports 421, Federal Reserve Bank of New York.
    2. 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.
    3. Lawrence H. White, 2009. "Federal Reserve Policy and the Housing Bubble," Cato Journal, Cato Journal, Cato Institute, vol. 29(1), pages 115-125, Winter.
    4. Bharat Trehan, 2009. "Predicting crises, part I: Do coming crises cast their shadows before?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue sep21.
    5. 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.
    6. 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.
    7. Ahrend, Rudiger, 2010. "Monetary ease: A factor behind financial crises? Some evidence from OECD countries," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 4, pages 1-30.
    8. Stephen G. Cecchetti, 1997. "Understanding the Great Depression: Lessons for Current Policy," NBER Working Papers 6015, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Economic crisis; Financial crisis; Monetary Policy; Taylor Rule; Taylor gap; Interest Term Spread; Recession;

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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