The Financial Crisis and Federal Reserve Policy

by Thomas, Lloyd B.

• ISBN13: 9780230108462
• ISBN10: 0230108466
• Format: Hardcover
• Copyright: 2011-02-15
• Publisher: Palgrave Macmillan

Summary

Written for the motivated non-specialist, this work provides the most clear and thorough coverage available of the causes and consequences of the Great Financial Crisis and the role of the Federal Reserve in preventing it from escalating into a massive depression a la the 1930s.The Great Recession that followed the popping of the dual credit and housing bubbles deprived more than 8 million Americans of their jobs and triggered a per capita loss of income of more $6,000 in 2008 and 2009 alone. This work provides a clear and comprehensive explanation of the myriad forces that combined to create the bubbles that were the source of the economic contraction. It retraces the chain reaction that took place as these bubbles deflated. The channels through which the crisis spilled over to produce the Great Recession are carefully laid out. The book is unique in thoroughly contrasting the Federal Reserve's brilliant implementation of policies that saved us from disaster in the recent crisis with its inept behavior that strongly contributed to the Great Depression of the 1930s.

Author Biography

Lloyd B. Thomas is Professor of Economics at Kansas State University. He has served as a visiting professor at the University of Adelaide, University of California-Berkeley, University of Delaware, and Indiana University-Bloomington. His work has appeared in numerous economics journals and he has authored textbooks in money and banking and principles of economics, both of which have been published in multiple editions.

Table of Contents

Financial Crises:  An Overview * The Nature of Banking Crises * The Panic of 1907 and the Savings and Loan Crisis * Development of the Housing and Credit Bubbles * Bursting of the Twin Bubbles * The Great Crisis and the Great Recession of 2007-2009 * The Framework of Federal Reserve Monetary Control * Federal Reserve Policy in the Great Depression * The Federal Reserve’s Response to the Great Crisis * The Federal Reserve’s Exit Strategy and the Threat of Inflation * The Taylor Rule and Evaluation of U.S. Monetary Policy * Regulatory Reform Proposals