“Bernanke’s focus turned out to be incredibly important. It started a whole literature on how credit matters, above and beyond what’s reflected in interest rates. He changed our view of how monetary policy affects the economy. That idea had a huge impact on the Federal Reserve’s behaviour in the most recent crisis. In response to the financial crisis in the fall of 2008, the Fed not only followed the conventional central bank remedy – flood the system with liquidity and make sure there’s plenty of cash out there – but they also took extraordinary actions to keep credit flowing. “ Read more...
The best books on Learning from the Great Depression