The 2007-2009 Financial Crisis and Central Banks What does the Subprime Crisis teach us about Monetary Policy?
Date of Award
2011
Document Type
Thesis
Degree Name
Bachelors
Department
Social Sciences
First Advisor
Coe, Richard
Keywords
Subprime, Financial Crisis, Monetary Policy
Area of Concentration
Economics
Abstract
This thesis sets out to answer two major questions: was the Federal Reserve to blame, in part or in whole, for the 2007-2009 financial crisis, and what changes should be made to the theory of optimal monetary policy in order to avoid a repeat of the crisis. We survey the conventional theory of optimal monetary policy, as well as the actions of the Federal Reserve and the European Central Bank before and in response to the crisis. We consider the possible alternative courses of action and their effects, and we survey the course of the financial crisis itself. Finally, we conclude that, while monetary policy is partially to blame for the crisis, the Federal Reserve itself cannot be significantly faulted for its actions, and that the Federal Reserve and financial regulatory bodies should be combined into a single institution.
Recommended Citation
Julius, Niklaus C., "The 2007-2009 Financial Crisis and Central Banks What does the Subprime Crisis teach us about Monetary Policy?" (2011). Theses & ETDs. 4388.
https://digitalcommons.ncf.edu/theses_etds/4388
Rights
This bibliographic record is available under the Creative Commons CC0 public domain dedication. The New College of Florida, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.