An overview of the Fed's new credit policy tools and their cushioning effect on the COVID-19 recession

Michael D. Bordo and John Duca

Journal of Government and Economics, 2021, vol. 3, issue C

Abstract: The economics literature lacks articles that provide a broad roadmap—let alone a logical explanation—of the new set of Federal Reserve policy tools that were created to counter the COVID-19 recession. This study provides an overview of the motivation for these new credit-easing programs—namely to damp feedback mechanisms and channels that would otherwise amplify the downturn and impede a subsequent recovery. The study then briefly assesses the impact of the new policy tools and addresses the risks they might pose. In addition, the new credit easing tools are put into historical context through a discussion of their development as part of the Fed's evolving and expanding role in countering financial crises.

Keywords: Financial crises; Federal reserve; Credit easing; Lender of last resort; Corporate bonds; Corporate bond facility; Municipal bonds (search for similar items in EconPapers)
JEL-codes: E52 E58 G12 G18 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S2667319321000136
Gold Open Access journal

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jogoec:v:3:y:2021:i:c:s2667319321000136

DOI: 10.1016/j.jge.2021.100013

Access Statistics for this article

Journal of Government and Economics is currently edited by David Li, Eric Maskin and Zhangkai Huang

More articles in Journal of Government and Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().