Chairman Alan Greenspan.docx - Running Head MONETARY POLICY 1 MONETARY POLICY 2 Week 7 Discussion 2 Explain how monetary policy pursued by the Federal

Chairman Alan Greenspan.docx - Running Head MONETARY POLICY...

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Running Head: MONETARY POLICY 1
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MONETARY POLICY 2 Week 7 Discussion 2 Explain how monetary policy pursued by the Federal Reserve under Chairman Alan Greenspan in the 1990s and early 2000s contributed to both the longest consistent growth period in modern US history and the great Recession of 2008-2009. The Federal Reserve in 1987 the stock market dropped into a desperate recession. Chairman Alan Greenspan initiated a two-step procedure to address the need for liquidation. He supplied for liquidation for the commerce and individuals, but also made sought to reduce the demand for liquidity. The Federal Reserve adopted low interest rates to sustain the markets and reduce inflation. This strategy also involved increasing the interest rates with a rise in stock, and a consequential drop in rates with drops in stocks. This strategy was adopted by Alan Greenspan governance and served to create the longest consistent growth period since consumers and
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