A Quantification Of The 2008-2009 US Bailout Package

Cicero I. Limberea ()
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Cicero I. Limberea: “A.I. Cuza” University, Iasi, Romania. US Certified Public Accountant (CPA) and CF holder (ICAEW UK).

Review of Economic and Business Studies, 2009, issue 3, 127-135

Abstract: By examining the credit crunch causes and effects, this paper reflects on the necessity of the banks bailout package and its alternatives and quantifies a maximum non-inflationary bailout amount which is unlikely to cause permanent adjustments in the long term (trade-weighted) exchange rate equilibrium level of the US dollar. Furthermore it determines that the current bailout amounts are less than the maximum non-inflationary bailout amount and determines that to resolve the underlying credit crunch problem, an increase in non-bank bailout M1 and/or a tax reduction is necessary.

Keywords: credit crunch; M1; M3; ISLM equilibrium; demand shock; Keynesian multiplier; monetary policy; fiscal policy; mortgage prepayments changes; MBS; velocity of money supply; long term equilibrium of exchange rates. (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:aic:revebs:y:2009:i:3:limbereac

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