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Unformatted text preview: Pumping cash into banks and slowly banks began lending again very slowly o Monetary policy The federal reserve and European central bank: injecting liquidity and preventing deflation Increase the amount of money in the economy by decreasing interest rates and creating new money Interest rate 0% Quantitative Easing or printing money The federal reserve balance sheet create more money electronically, add money to their balance sheet buying toxic securities and buy treasury bonds so the gov can spend money o Fiscal policy The return of Keynesian economics Government stimulus: spending and tax cuts Deficits since 2008 and beyond Looking forward: an opportunity for reform or back to business as usual?...
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- Fall '08