Floored!: How a Misguided Fed Experiment Deepened and Prolonged the Great Recession
George Selgin
Floored!: How a Misguided Fed Experiment Deepened and Prolonged the Great Recession
George Selgin
This title is printed to order. This book may have been self-published. If so, we cannot guarantee the quality of the content. In the main most books will have gone through the editing process however some may not. We therefore suggest that you be aware of this before ordering this book. If in doubt check either the author or publisher’s details as we are unable to accept any returns unless they are faulty. Please contact us if you have any questions.
In October 2008, as the U.S. economy plunged, the Federal Reserve began paying interest on banks’ reserve balances. The resulting switch to a floor system of monetary control, in which changes in the interest rate on reserves, rather than reserve creation or destruction, became the Fed’s chief tool for influencing economic activity, was to have far-reaching consequences–almost all of them regrettable.
Besides intensifying the downturn by causing banks to hoard reserves, the floor system all but destroyed the market for unsecured interbank loans that had been banks’ ordinary first resort source of last-minute liquidity. By depriving the Fed’s asset purchases of the ability to stimulate investment and spending, it also compelled the Fed to compensate by purchasing assets on an unprecedented scale. All of this resulted in a substantial increase in the Fed’s role in allocating scarce credit. Finally, by severing the ordinary connection between the stance of monetary policy and the extent of the Fed’s asset holdings, the floor system risks turning the Fed’s balance sheet into a fiscal-policy playground.
Floored! offers a matchless account of our post-crisis monetary system’s history and shortcomings.
This item is not currently in-stock. It can be ordered online and is expected to ship in 7-14 days
Our stock data is updated periodically, and availability may change throughout the day for in-demand items. Please call the relevant shop for the most current stock information. Prices are subject to change without notice.
Sign in or become a Readings Member to add this title to a wishlist.