I'm still trying to grasp the concepts of endogenous money.
If the Fed ultimately has no say on the money supply, then can Alan Greenspan really be blamed for the crisis? After all, wasn't it the banks themselves, not the Fed, handing out private debt like it was going out of style?
(1) Financial regulation to limit the banks' behaviour is what would have stopped the subprime and CDOs disasters.
(2) It is not that Fed has no say in the flow of credit: financial regulation can control what credit is used for.
(3) Greenspan was a neoliberal ideologue, who dismantled or refused to see regulation implemented. He was fooled by the efficient markets hypothesis and the other neoclassical nonsense. It can certainly be blamed, in my view.
LK,
ReplyDeleteNot sure if you've read it, but I found an interesting - albeit old - paper on post-Keynesian methodology.
http://onlinelibrary.wiley.com/doi/10.1111/1467-9485.00061/pdf
there is a response:
http://onlinelibrary.wiley.com/doi/10.1111/1467-9485.00136/pdf
there is a further response from the original authors but I can't find access to it:
https://www.escholar.manchester.ac.uk/uk-ac-man-scw:1b7659
I have to admit I'm uncertain on post-Keynesian methodology (pun not intended).
LK,
ReplyDeleteI'm still trying to grasp the concepts of endogenous money.
If the Fed ultimately has no say on the money supply, then can Alan Greenspan really be blamed for the crisis? After all, wasn't it the banks themselves, not the Fed, handing out private debt like it was going out of style?
(1) Financial regulation to limit the banks' behaviour is what would have stopped the subprime and CDOs disasters.
ReplyDelete(2) It is not that Fed has no say in the flow of credit: financial regulation can control what credit is used for.
(3) Greenspan was a neoliberal ideologue, who dismantled or refused to see regulation implemented. He was fooled by the efficient markets hypothesis and the other neoclassical nonsense. It can certainly be blamed, in my view.