Treasury and the Fed during the financial crisis of 2007-2009
Fluid Flow
October 20, 2020The rapid growth of the national debt alarmed some politicians and created pressure for restricting Congress’s unlimited ability to spend.
October 20, 2020Treasury and the Fed during the financial crisis of 2007-2009
Charles Calomiris, an economist at Columbia University, said the following about the initiatives of the Treasury and the Fed during the financial crisis of 2007-2009: It has been a really head-spinning range of unprecedented and bold actions.That is exactly as it should be. But I’m not saying that it’s without some cost and without some risk.â€
1) What was unprecedented about the Treasury and the Fed’s actions? What risks did these actions involve?
2) Do you think that the Fed’s actions should be head-spinning†(i.e. suprising), or do you think they should be predictable? Explain.
