Hetzel monetary policy in the 2008 09 recession
This presentation is the property of its rightful owner.
Sponsored Links
1 / 3

Hetzel “ Monetary Policy in the 2008-09 Recession” PowerPoint PPT Presentation


  • 53 Views
  • Uploaded on
  • Presentation posted in: General

Hetzel “ Monetary Policy in the 2008-09 Recession”. Vaughan / Economics 639. Hetzel in a Nutshell. Negative real shocks (hike in energy prices, decline in housing prices, etc.) tipped the economy into a moderate recession in December 2007.

Download Presentation

Hetzel “ Monetary Policy in the 2008-09 Recession”

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Hetzel monetary policy in the 2008 09 recession

Hetzel“Monetary Policy in the 2008-09 Recession”

Vaughan / Economics 639


Hetzel in a nutshell

Hetzel in a Nutshell

  • Negative real shocks (hike in energy prices, decline in housing prices, etc.) tipped the economy into a moderate recession in December 2007.

  • Fed “tightened” monetary policy out of fear of inflation, thereby turning a moderate recession into a severe one.

    • No reduction in Fed funds target from April 30th, 2008 until October 8th, 2008 – despite gathering evidence of a serious recession.

    • Hawkish statements by FOMC members in June caused expected future Fed funds to rise from 2.0% to 2.5% by November 2008.

    • RESULT: Largest decline in nominal GDP since the 1930s.

  • Implication: Financial crisis was endogenous response to severe recession.


Hetzel in a nutshell1

Hetzel in a Nutshell

  • Note large drop in nominal GDP growth.

  • Nominal GDP growth still low (i.e., tight money is the cause of anemic recovery).


  • Login