Recently added articles from The Cato Journal:
Editor's note.(26th Annual Monetary Conference)(Conference notes)
Jan 01, 2009; ... The articles in this issue of the Cato Journal were first presented at the Cato Institute's 26th Annual Monetary Conference, November 19, 2008. The intent of that conference was to focus on the U.S. subprime crisis, but by the time of the conference it was clear we were facing a full-blown ...
Bailout or bankruptcy?
Jan 01, 2009; ... At the end of September 2007, the U.S. economy had experienced 24 consecutive quarters of positive GDP growth, at an average annual rate of 2.73 percent. The S&P 500 Index stood at roughly 1,500, having rebounded over 600 points from its low point in 2003. Unemployment was below 5 percent, ...
Origins of the financial market crisis of 2008.
Jan 01, 2009; ... I begin by describing the factors that contributed to the financial market crisis of 2008. I end by proposing policies that could have prevented the baleful effects that produced the crisis. Factors Contributing to the Financial Crisis At least three factors exercised ...
Reflections on the financial crisis.
Jan 01, 2009; ... I am going to make several unrelated points, and then I am going to discuss how we got into this financial crisis and some needed changes to reduce the risk of future crises. Some Observations First, we should close down as promptly as possible Fannie Mae and Freddie ...
Monetary policy and asset prices revisited.(Report)
Jan 01, 2009; ... We are in the midst of a global financial crisis that is now weighing heavily on economies around the world. Although the outlook remains extremely uncertain, both the fragility of the financial system and the weakness in real activity seem likely to persist for a while. To promote maximum ...
Asset prices and monetary policy.(Report)
Jan 01, 2009; ... Crisis: Time to Ponder on Traditional Wisdom Beyond dealing with the immediate problems, any crisis raises questions of why and how we got there and what lessons should be drawn to avoid a repetition of past developments--without laying the ground for a new disaster. This line ...
What lessons can we learn from the boom and turmoil?(financial crisis)(Report)
Jan 01, 2009; ... The current financial crisis undoubtedly will inspire a great deal of research in the years ahead, and it may take some time before anything like a professional consensus emerges on causes and consequences. After all, it took several decades to document the causes of the Great Depression, ...
Financial innovation, regulation, and reform.(Report)
Jan 01, 2009; ... Financial innovations often respond to regulation by sidestepping regulatory restrictions that would otherwise limit activities in which people wish to engage. Securitization of loans (e.g., credit card receivables, or subprime residential mortgages) is often portrayed, correctly, as ...
Bad rules produce bad outcomes: underlying public-policy causes of the U.S. financial crisis.(Report)
Jan 01, 2009; ... The current global financial crisis is the worst economic crisis since the Great Depression, with no end in sight. Already, much political finger pointing has occurred, with most of those fingers pointed at supposedly greedy bankers, investors, and hedge-fund managers as well as the ...
Federal reserve policy and the housing bubble.
Jan 01, 2009; ... The U.S. housing bubble and the fallout from its bursting are not the results of a laissez-faire monetary and financial system. They happened in an unanchored government fiat monetary system with a restricted financial system. What Happened and Why? Our current ...
The case for policy sustainability.
Jan 01, 2009; ... Should we worry about moral hazard while the house is burning? The discussion about economic policy is full of biblical metaphors, the language of water and floods, and of fire extinction during crises. Metaphors, even when not mixed, are often obstacles to the clarity of thought. That is ...
Moral hazard in the policy response to the 2008 financial market meltdown.(Report)
Jan 01, 2009; ... The Cato Institute is the ideal place to draw lessons from the subprime crisis. The organization's mission focuses on the interaction of public policies with free markets and limited government. Even the most ardent believer in free markets must fully understand that individual liberty ...
Moral hazard and the financial crisis.(Report)
Jan 01, 2009; ... There is no denying that the current financial crisis has delivered a major seismic shock to the policy landscape. In country after country, we see governments panicked into knee-jerk responses and throwing their policy manuals overboard: bailouts and nationalizations on an unprecedented ...
Money and the present crisis.(Report)
Jan 01, 2009; ... We remain in an economic crisis and financial crisis, one that Gary Gorton has named "The Panic of 2007" (Gorton 2008). The thesis of this article is that monetary policy has played a pivotal role. Under Alan Greenspan and now Ben Bernanke, the Fed has conducted monetary policy so as to ...
Interest-rate targeting during the great moderation: a reappraisal.(Report)
Jan 01, 2009; ... In the era that has come to be known as the "Great Moderation" (dating from the mid-1980s), the Federal Reserve's policy committee (the Federal Open Market Committee or FOMC) pursued what has to be called a "learning-by-doing" strategy. The data that counted as relevant feedback--the ...
The way forward: incentives, not regulations.(Viewpoint essay)
Jan 01, 2009; ... Most of the world today is concentrating not on the way forward after the crisis, but the way out of the crisis. This concentration brings the very real danger that steps taken now will cause problems later. The most obvious danger, perhaps, is that enormous government spending, here and ...
After War: The Political Economy of Exporting Democracy.
Jan 01, 2009; ... After War: The Political Economy of Exporting Democracy Christopher J. Coyne Stanford, Calif.: Stanford University Press, 2006, 238 pp. Christopher Coyne's book seeks to contribute to an understanding of the "precise mechanisms and contexts that contribute ...
Capitalism at Work: Business, Government, and Energy; Book 1 of Political Capitalism (A Trilogy).(Book review)
Jan 01, 2009; ... Capitalism at Work: Business, Government, and Energy; Book 1 of Political Capitalism (A Trilogy) Robert L. Bradley Jr. Salem, Mass.: M & M Scrivener Press, 2009, 485 pp. Robert L. Bradley Jr., for many years had to balance loyalty to his employer, Enron, ...
On the Contrary: Leading the Opposition in a Democratic South Africa.(Book review)
Jan 01, 2009; ... On the Contrary: Leading the Opposition in a Democratic South Africa Tony Leon Johannesburg, South Africa: Jonathan Bull Publishers, 2008, 766 pp. On the Contrary is a seamless combination of a memoir of an influential South African politician and a ...
Aggregate supply-driven deflation and its implications for macroeconomic stability.
Sep 22, 2008; ... Deflation is generally considered to be inconsistent with macroeconomic stability. Any sustained decline in the price level is widely believed to be associated with weak to negative economic growth, a lower bound of zero on the policy interest rate, and an increase in financial ...