Economists' Views: New Playbook for a Financial Crisis

21 October 2008

The government and Federal Reserve have continued to write policy at an unprecedented rate since NERA's September 26th and October 10th briefs on the Paulson Plan and the Emergency Economic Stabilization Act of 2008.

Our most recent brief describes the extraordinary sequence of policy developments from the Federal Reserve, US Treasury, Federal Deposit Insurance Corporation (FDIC), and central banks abroad.

We attempt to provide insights into the motivation for these policies and to place them in context, pointing to how fast and how dramatically the interventions have developed. The new brief places particular emphasis on the critical role of the Federal Reserve in creating liquidity domestically and internationally. We also discuss prospective policies to provide relief in the housing market, which remains a subject of active debate.

For further discussion on the Paulson Plan, please visit the links located in the right-hand column of this page.