To protect the economy in the short run, the Fed acted quickly on five fronts to provide emergency liquidity. But in the long run, no major change in monetary policy should be needed because the fundamentals of the economy remain solid.

The rapid growth in China and India has led to an increase in demand for oil, which, in turn, has driven up prices. After adjusting for inflation, a barrel of oil today costs about what it did during the 1979 oil shock.

Research has consistently found that implied volatility is a conditionally biased predictor of realized volatility across asset markets. This paper evaluates explanations for this bias in the market for options on foreign exchange futures. Several recently proposed solutions - including a model...