The Financial Crisis: Miss-Diagnosis and Reactionary Responses

Robert Eisenbeis ()

Atlantic Economic Journal, 2010, vol. 38, issue 3, 283-294

Abstract: This paper divides the current financial crisis into three phases and describes the policy responses to each. In Phase I policy makers misdiagnosed it as a traditional liquidity crisis. Phase II was a triage period as policy makers addressed the significant solvency problems that became apparent in the country’s largest financial institutions. Phase III was the pronounced slowdown in the real U.S. economy during which the Federal Reserve expanded its balance sheet by purchasing long term Treasuries and newly issued mortgage backed securities from GSEs. This paper describes the financial market conditions that characterized each of the three phases, describes the policy responses, and finally, attempts to sort out what we have learned and not learned from this crisis and how to handle it so far. Copyright International Atlantic Economic Society 2010

Keywords: Financial crisis; Financial crisis; Federal Reserve (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://hdl.handle.net/10.1007/s11293-010-9235-1 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The Financial Crisis: Miss-Diagnosis and Reactionary Responses (2009)
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:kap:atlecj:v:38:y:2010:i:3:p:283-294

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11293/PS2

DOI: 10.1007/s11293-010-9235-1

Access Statistics for this article

Atlantic Economic Journal is currently edited by Kathleen S. Virgo

More articles in Atlantic Economic Journal from Springer, International Atlantic Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().