Exigent and Unusual Circumstances: The Federal Reserve and the U.S. Financial Crisis

2010 ◽  
Author(s):  
Christian A. Johnson
Keyword(s):  
Financial Crisis ◽  
Federal Reserve ◽  
The U.S

scholarly journals Quantitative Easing and the U.S. Stock Market: A Decision Tree Analysis

2016 ◽  
Vol 7 (2) ◽  
pp. 135-156
Author(s):  
Ramaprasad Bhar ◽  
A.G. Malliaris ◽  
Mary Malliaris
Keyword(s):  
Financial Crisis ◽  
Stock Market ◽  
Interest Rates ◽  
Federal Reserve ◽  
Quantitative Easing ◽  
Short Term ◽  
Federal Funds ◽  
Monetary Policies ◽  
The U.S

The Financial Crisis of 2007-09 caused the U.S. economy to experience a relatively long recession from December 2007 to June 2009. Both the U.S. government and the Federal Reserve undertook expansive fiscal and monetary policies to minimize both the severity and length of the recession.  Most notably, the Federal Reserve initiated three rounds of unconventional monetary policies known as Quantitative Easing.  These policies were intended to reduce long-term interest rates when the short term federal funds rates had reached the zero lower bound and could not become negative. It was argued that the lowering of longer-term interest rates would help the stock market and thus the wealth of consumers.  This paper investigates this hypothesis and concludes that quantitative easing has contributed to the observed increases in the stock market’s significant recovery since its crash due to the financial crisis

scholarly journals REITs and the financial crisis: Empirical evidence from the U.S.

2009 ◽  
Vol 4 (11) ◽  
Author(s):  
Tobias Basse ◽  
Meik Friedrich ◽  
Eduardo Vazquez Bea
Keyword(s):  
Financial Crisis ◽  
Empirical Evidence ◽  
The U.S

scholarly journals INSTYTUCJONALNA I KOMPETENCYJNA EWOLUCJA BANKU CENTRALNEGO STANÓW ZJEDNOCZONYCH AMERYKI W XX WIEKU

2016 ◽  
Vol 10 (2) ◽  
pp. 275
Author(s):  
Wojciech Kwiatkowski
Keyword(s):  
Twentieth Century ◽  
Central Bank ◽  
Federal Reserve ◽  
The United States ◽  
Institutional Evolution ◽  
Federal Reserve System ◽  
Initial Shape ◽  
Treasury Department ◽  
Reserve System ◽  
The U.S

Institutional and Competence Evolution of the U.S. Central Bank in the Twentieth CenturySummary The article describes the initial shape of the U.S. central bank, i.e. the Federal Reserve System created under the federal act of 1913 as a “Federal Reserve”, as well as the reasons for its competence and institutional evolution mainly in the thirties of the twentieth century. The paper seeks to identify the consequences of the absence of statutory regulations – in many ways necessary for the proper functioning of the central bank in the United States as a confederation, which has become a major cause of the appropriation of powers by the representatives of the private sector at the central bank. In addition, by analyzing the agreement concluded by the representatives of the bank and the U.S. Treasury Department the article shows the consequences of the absence of constitutional guarantees for the central bank’s operational independence. The article also seeks to name and describe the laws passed in the twentieth century, which have contributed significantly to today’s field of competence of the Federal Reserve System and its present modus vivendi.

scholarly journals Financial crisis and economic recession

2021 ◽  
pp. 229-234
Author(s):  
Jesús Huerta de Soto
Keyword(s):  
Financial Crisis ◽  
Real Estate ◽  
Federal Reserve ◽  
Consumer Goods ◽  
New Technologies ◽  
Economic Recession ◽  
The United States ◽  
Credit Expansion ◽  
Goods And Services ◽  
Monetary Shock

The severe financial crisis and resulting worldwide economic recession we have been forecasting for years are finally unleashing their fury. In fact, the reckless policy of artificial credit expansion that central banks (led by the American Federal Reserve) have permitted and orchestrated over the last fifteen years could not have ended in any other way. The expansionary cycle that has now come to a close was set in motion when the American economy emerged from its last recession in 2001 and the Federal Reserve reembarked on the major artificial expansion of credit and investment initiated in 1992, an expansion unbacked by a parallel increase in voluntary household saving. For many years, the money supply in the form of banknotes and deposits has grown at an average rate of over ten percent per year (which means that every seven years the total volume of money circulating in the world has doubled). The media of exchange originating from this severe fiduciary inflation have been placed on the market by the banking system as newly created loans granted at extremely low (and even negative in real terms) interest rates. The above fueled a speculative bubble in the shape of a substantial rise in the prices of capital goods, real estate assets, and the securities that represent them and are exchanged on the stock market, where indexes soared. Curiously, as in the «roaring» years prior to the Great Depression of 1929, the shock of monetary growth has not significantly influenced the prices of the subset of goods and services at the final-consumer level of the production structure (approximately only one third of all goods). The decade just past, like the 1920s, has seen a remarkable increase in productivity as a result of the introduction on a massive scale of new technologies and significant entrepreneurial innovations which, were it not for the «money and credit binge,» would have given rise to a healthy and sustained reduction in the unit price of the goods and services all citizens consume. Moreover, the full incorporation of the economies of China and India into the globalized market has gradually raised the real productivity of consumer goods and services even further. The absence of a healthy «deflation» in the prices of consumer goods in a period of such considerable growth in productivity as that of recent years provides the main evidence that the monetary shock has seriously disturbed the economic process. Economic theory teaches us that, unfortunately, artificial credit expansion and the (fiduciary) inflation of media of exchange offer no shortcut to stable and sustained economic development, no way of avoiding the necessary sacrifice and discipline behind all voluntary saving. (In fact, particularly in the United States, voluntary saving has not only failed to increase, but in some years has even fallen to a negative rate.) Indeed, the artificial expansion of credit and money is never more than a short-term solution, and often not even that. In fact, today there is no doubt about the recessionary consequence that the monetary shock always has in the long run: newly created loans (of money citizens have not first saved) immediately provide entrepreneurs with purchasing power they use in overly ambitious investment projects (in recent years, especially in the building sector and real-estate development). In other words, entrepreneurs act as if citizens had increased their saving, when they have not actually done so.

The Financial Crisis and the Federal Reserve

2010 ◽  
Vol 24 (1) ◽  
pp. 495-508 ◽  
Author(s):  
Frederic S. Mishkin
Keyword(s):  
Financial Crisis ◽  
Federal Reserve
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