Acerca das origens da crise

“Did Fed Policy Matter to Housing Prices?” de David Beckwoth (Macro and Other Maket Musings)

The “cross of gold”

“As the Fed Splintered the Cross of Gold, Farmers Held the Bag” de Brian Dimtrovic (Forbes)

One of the reasons the Fed was created in 1913 was to give ear to the concerns, such as they were, of the down-and-out farmers. Yet the doubling of the dollar float did nothing to alter the real economics of farming in a modernized economy. Instead, the effect of the Fed policy was to visit wild gyrations on the price level – and hence the values of assets – on the nation as a whole, which culminated in a Great Depression for everybody, farmer and non-farmer alike.

It’s official

It’s Official: Ron Paul Is Head Of Monetary Policy Subcommittee

(vejam o video a partir do minuto 3:30)

Open Letter to Ben Bernanke

No WSJ, uma carta aberta de vários economistas ligados ao GOP que se opõem ao QE2

We believe the Federal Reserve’s large-scale asset purchase plan (so-called “quantitative easing”) should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment.

We subscribe to your statement in the Washington Post on November 4 that “the Federal Reserve cannot solve all the economy’s problems on its own.” In this case, we think improvements in tax, spending and regulatory policies must take precedence in a national growth program, not further monetary stimulus.

We disagree with the view that inflation needs to be pushed higher, and worry that another round of asset purchases, with interest rates still near zero over a year into the recovery, will distort financial markets and greatly complicate future Fed efforts to normalize monetary policy.

The Fed’s purchase program has also met broad opposition from other central banks and we share their concerns that quantitative easing by the Fed is neither warranted nor helpful in addressing either U.S. or global economic problems.

Quantitative easing

fonte: Interest Rate Observer

Central Banking for dummies

(via Inflaccionista)

As origens da crise subprime

John Taylor

New empirical research establishes a strong relationship between very low interest rates set by the Fed, as in the period 2002-2005, and a risk-taking search for yield. This policy-induced lessening of risk aversion has been emphasized by Raghu Rajan and others as a key factor bringing on the financial crisis. The new empirical support for this view is reported in the working paper “Risk, Uncertainty and Monetary Policy” by Geert Bekaert, Marie Hoerova, and Marco Lo Duca.(…)

The bottom line of this empirical research, as the authors put it, is that “lax monetary policy increases risk appetite (decreases risk aversion) in the future, with the effect lasting for about two years and starting to be significant after five months.” Their result is important to the policy debate because such monetary policy has been “cited as one of the contributing factors to the build up of a speculative bubble prior to the 2007-09 financial crisis.”

As origens da crise subprime

Da resposta de Raghuram Rajan (U.Chicago) a Paul Krugman a propósito da recensão deste ao livro “Fault Lines: How Hidden Fractures Still Threaten the World Economy” de Rajan.

It is true that the European Central Bank was less aggressive, but only slightly so; It brought its key refinancing rate down to only 2 percent while the Fed brought the Fed Funds rate down to 1 percent. Clearly, both rates were low by historical standards. More important, what Krugman does not point out is that different Euro area economies had differing inflation rates, so the real monetary policy rate was substantially different across the Euro area despite a common nominal policy rate. Countries that had strongly negative real policy rates – Ireland and Spain are primary exhibits – had a housing boom and bust, while countries like Germany with low inflation, and therefore higher real policy rates, did not. Indeed, a working paper by two ECB economists, Angela Maddaloni and José-Luis Peydró, indicates that the ultra-low rates by both the ECB and the Fed at this time had a strong causal effect in relaxing banks’ commercial, mortgage, and retail lending standards over this period.

Did the Fed Cause the Housing Bubble?

No passado dia 11, Alan Greenspan publicou um artigo no WSJ (“The Fed Didn’t Cause the Housing Bubble”) em que procuraval ilibar a Reserva Federal (e logo também a si) de qualquer responsabilidade na criação da bolha imobiliária e da crise financeira. Neste artigo, Greenspan responde a John Taylor que noutro artigo do WSJ (“How Government Created the Financial Crisis”) apontava o dedo à actuação do Fed e do governo americano. (*)

Para comentar o assunto o WSJ reuniu um painel constituido por David Henderson, Gerald P. O’Driscoll, Todd J. Zywicki, David Malpass, Judy Shelton e Vincent Reinhart. O resultado final é 4.5-1.5 a favor da “condenação” do Fed. Chamo a vossa atenção para as contribuições de O’Driscoll e Zywicki.

Aproveito também para sugerir a leitura deste post do Macro and Other Market Musings.

(*) Relativamente ao artigo de Greenspan, chamo também a atenção para os avisos que ele faz acerca da tentação de aumentar a regulação nos mercados financeiros. Isto pode explicar a razão pela qual, contrariamente ao que sucedeu com a sua audição pelo Congresso em Outubro de 2008, este artigo fosse pouco publicitado.