Monetary policy and balance sheet adjustment

Otmar Issing

No 15, SAFE White Paper Series from Leibniz Institute for Financial Research SAFE

Abstract: In the wake of the Global Financial Crisis that started in 2007, policymakers were forced to respond quickly and forcefully to a recession caused not by short-term factors, but rather by an over-accumulation of debt by sovereigns, banks, and households: a so-called balance sheet recession. Though the nature of the crisis was understood relatively early on, policy prescriptions for how to deal with its consequences have continued to diverge. This paper gives a short overview of the prescriptions, the remaining challenges and key lessons for monetary policy.

Keywords: recession; monetary policy; balance sheet adjustment (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:safewh:15

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