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hw4-100 (3) - b What are the main problems with a proactive...

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Econ 1500: HW4: Monetary policy 1. Bernanke: Crash course on central banking a. What did the Fed do in the face of bank panics in the early 1930s? b. What was the impact of this approach on output? c. Why did central bankers get it right in 1987? 2. Bernanke: Asset market bubbles a. What is Bernanke’s preferred tool to minimize booms and busts in asset markets?
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Unformatted text preview: b. What are the main problems with a proactive monetary policy approach to asset bubbles? c. Empirically, when is credit expansion most often indicative of a bubble? d. Mention 2 mistakes made by the Fed that prolonged and extended the Great Depression...
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