The Paulson Proposal: Economists' Views

Fri Sep 26 16:24:38 EDT 2008

In response to the ongoing economic crisis, members of NERA's Securities and Finance Practice have drafted this brief, which presents a summary of current thinking by academic economists and reviews the proposed Paulson Plan as well as alternative plans intended to stabilize the financial system. The brief begins by providing background describing how the US economy arrived at its current state. It then examines whether or not the Paulson Plan can solve the crisis and questions whether the alternative plan proposed by a group of Congressional Republicans is a better option.

NERA has also published a paper examining implementation considerations for the Paulson Plan, with a specific focus on the reverse auction process and the key economic issues to consider when designing auctions to purchase troubled assets.

This brief presents a summary of current thinking by academic economists and does not necessarily represent the views of NERA or any NERA economist.