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The Great Recession
Market Failure or Policy Failure?

$54.99 (P)

Part of Studies in Macroeconomic History

  • Date Published: April 2012
  • availability: In stock
  • format: Hardback
  • isbn: 9781107011885

$54.99 (P)

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About the Authors
  • Since publication of Robert L. Hetzel's The Monetary Policy of the Federal Reserve (Cambridge University Press, 2008), the intellectual consensus that had characterized macroeconomics has disappeared. That consensus emphasized efficient markets, rational expectations, and the efficacy of the price system in assuring macroeconomic stability. The 2008–2009 recession not only destroyed the professional consensus about the kinds of models required to understand cyclical fluctuations but also revived the credit-cycle or asset-bubble explanations of recession that dominated thinking in the 19th and first half of the 20th century. These “market-disorder” views emphasize excessive risk taking in financial markets and the need for government regulation. The present book argues for the alternative “monetary-disorder” view of recessions. A review of cyclical instability over the last two centuries places the 2008–2009 recession in the monetary-disorder tradition, which focuses on the monetary instability created by central banks rather than on a boom-bust cycle in financial markets.

    • A comprehensive overview of the policies of central banks and regulators during the 20082009 recession
    • Challenges readers to think about need for reform of the monetary standard and financial regulation, not to personify institutional failures or blame scapegoats
    • A ready comprehension of complex issues of monetary policy through use of historical narrative
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    Product details

    • Date Published: April 2012
    • format: Hardback
    • isbn: 9781107011885
    • length: 400 pages
    • dimensions: 235 x 157 x 25 mm
    • weight: 0.65kg
    • contains: 64 b/w illus. 4 tables
    • availability: In stock
  • Table of Contents

    1. The 2008–9 recession: market or policymaker failure?
    2. Recessions: financial instability or monetary mismanagement?
    3. The great contraction:
    4. Monetary policy and bank runs in the great contraction
    5. Vigorous recovery and relapse:
    6. Inter-war international monetary experiments
    7. Identifying the shocks that cause recessions
    8. From stop-go to the great moderation
    9. Controlling bank risk taking: market or regulator discipline?
    10. The housing crash: subsidizing housing and bank risk taking
    11. Bubble trouble: easy money in 2003 and 2004?
    12. What caused the great recession of 2008–9?
    13. What caused the great leverage collapse?
    14. The distinctions between credit, monetary, and liquidity policy
    15. Fed market interventions: the experiment with credit policy
    16. Evaluating policy: what are the relevant counterfactuals?
    17. The business cycle: inherent instability or monetary instability?
    18. Why is learning so hard?
    19. How should society regulate capitalism: rules vs. discretion?

  • Instructors have used or reviewed this title for the following courses

    • International Finance
    • Macroeconomics for MBA
    • Monetary Theory and Policy
  • Author

    Robert L. Hetzel, Federal Reserve Bank of Richmond
    Robert L. Hetzel is Senior Economist and Policy Adviser in the Research Department of the Federal Reserve Bank of Richmond, where he participates in debates over monetary policy and prepares the Bank's president for meetings of the Federal Open Market Committee. Dr Hetzel's research on monetary policy and the history of central banking has appeared in publications such as the Journal of Money, Credit, and Banking; the Journal of Monetary Economics; the Monetary and Economics Studies series of the Bank of Japan; and the Carnegie-Rochester Conference Series. His writings provided one of the catalysts for the congressional hearings and treasury studies that led to the issuance of Treasury Inflation Protected Securities (TIPS). Dr Hetzel has given seminars or served as a visiting scholar at the Austrian National Bank, the Bank of England, the Bank of Japan, the Bundesbank, the European Central Bank, the National Bank of Hungary and the Center for Research into European Integration in Bonn, Germany. He received his PhD in 1975 from the University of Chicago, where Nobel Laureate Milton Friedman chaired his dissertation committee. Dr Hetzel is author of The Monetary Policy of the Federal Reserve: A History (Cambridge University Press, 2008).

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