It’s that “vision” thing:

نویسنده

  • Jan Kregel
چکیده

Despite the creation of a myriad of Federal Reserve (Fed) special discount window facilities, unlimited swap lending to central banks worldwide, and the creation of the Troubled Asset Relief Program (TARP), there appears to be no improvement in financial market conditions. In particular, it is widely lamented that, even with massive capital injections, the banking system is not lending to support the private sector. Comparing the current government response with those to the Great Depression in the 1930s and the Japanese crisis in the 1990s reveals surprising similarities—and the absence of at least three crucial factors. The similarities lie in the initial reliance on monetary and exchange rate policy to reflate asset prices and prevent deflation in goods prices in order to restore normal functioning of the financial system. The differences relate to the absence of (1) direct measures to support bank incomes through interest rate policy, (2) an understanding of the failures of the “modernized” financial system, and thus (3) a clear design for the shape and structure of the financial system that is to replace the current one. The third factor may be the most important deficiency related to attempts to emerge from the current crisis.

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تاریخ انتشار 2009