This paper analyzes the Federal Reserve’s major policy actions in response to the financial crisis. The analysis is divided into the pre-Lehman and post-Lehman monetary policies. Specifically, I describe the pre- and post-Lehman monetary policy actions that I believe were appropriate and those...

The current financial turmoil has generated considerable discussion of liquidity. Moreover, it has been widely reported that the Federal Reserve played a major role in supplying liquidity to financial markets during this distressed time. This article describes two ways in which the Fed has...

Would financial markets and the economy have been better off if the Fed pursued a policy of quantitative easing sooner?

Current excess reserves could create a massive increase in the money supply if banks significantly increase their lending or investing.

Panel Discussion, Cato Institute, 24th Annual Monetary Conference, Washington, D.C., Nov. 16, 2006

Regional Economic Summit, Evansville, Ind., Nov. 20, 2008

Cato Institute, Washington, D.C., Nov. 30, 2007

Memphis, Tenn., Oct. 14, 2008

The 2007-2008 financial crises has made it painfully obvious that markets may quickly turn illiquid. Moreover, recent experience has taught us that distress and lack of active trading can jump "around" between seemingly unconnected parts of the financial system contributing to transforming...

Why are asset prices so much more volatile and so often detached from their fundamentals? Why does the burst of financial bubbles depress the real economy? This paper addresses these questions by constructing an infinite-horizon heterogeneous-agent general-equilibrium model with speculative...