Getting off track how government actions and interventions caused, prolonged, and worsened the financial crisis /

Main Author: Taylor, John B.
Corporate Author: ebrary, Inc.
Format: Online Book
Language: English
Published: Stanford, Calif. : Hoover Institution Press, c2009.
Series: Hoover Institution Press publication ; 570.
Subjects:
Online Access: http://ezproxy.villanova.edu/login?URL=http://site.ebrary.com/lib/villanova/docDetail.action?docID=10622959
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Review by Choice Review

In this slim, well-written volume, Taylor (Hoover Institution fellow and economics professor, Stanford Univ.) succinctly and coherently identifies the initial causes of the financial crisis beginning in 2007 and the reasons it worsened in 2008. An easy monetary policy, according to the author, led to low interest rates that contributed to a housing boom and excessive risk taking. Complex securitization and inadequate regulation of government-sponsored lending agencies also contributed to the problem. Government monetary and fiscal policy focused on increasing liquidity to address the crisis, but Taylor presents an empirically based analysis showing that the breakdown in financial markets was related to risk rather than liquidity. To provide readers with a point of reference, he then reviews the prior two decades of relative stability when national and international monetary policies were appropriate to economic conditions. This excellent book concludes with an epilogue advocating returning to a set of principles for interest setting that conforms to those of the prior two decades; basing government interventions on a clear diagnosis of the causes of a problem; and creating a predictable basis for providing financial assistance. Summing Up: Highly recommended. General readers; all levels of students; researchers; professionals. E. L. Whalen formerly, Clarke College

Copyright American Library Association, used with permission.