Fed’s policy in the current crisis

TERRA ECONOMICUS, , Vol. 12 (no. 4),
p. 52-58

The article presents an analysis of the impact of institutional features of the US economy to implement the practice of unconventional measures of monetary policy in the current crisis. Article researches the programs of unconventional monetary policy, which the Fed held before and after the collapse of the bank Lehman Brothers, systematized and compared the Fed’s actions during the crisis in the US at the different stages. A detailed study of the programs, which the Fed used to influence the economy in the crisis, shows a special character of these programs. On the one hand, it was definitely the adaptation of the measures applied to the current situation. On the other hand, the institutional features of the US financial market dictated the need for exposure on the certain sectors of the financial market, but not on the whole market.

Keywords: institutional factors; unconventional monetary policy; the monetary policy of the Fed

  • Bernanke B. (2002). Deflation: Making Sure «It» Doesn’t Happen Here // Remarks before the National Economists Club, Washington, DC, November 21.
  • Bernanke B. (2003). Some Thoughts on Monetary Policy in Japan // Japan Society of Monetary Economics, Tokyo, Japan, May 31.
  • Bernanke B. (2009). The Crisis and the Policy Response // Speech at the Stamp Lecture, London School of Economics, London, January 13.
  • Bowman D., Cai F., Davies S., Kamin S. (2011). Quantitative Easing and Bank Lending: Evidence from Japan // Board of Governors of the Federal Reserve System, International Finance Discussion Papers, № 1018, June.
  • Cecioni M., Ferrero M., Secchi A. (2011). Unconventional monetary policy in theory and in practice // Questioni di Economia e Finanza, № 102, September.
  • Chen H., Cúrdia V., Ferrero A. (2011). The Macroeconomic Effects of Large-Scale Asset Purchase Programs // Federal Reserve Bank of New York Staff Reports, no. 527.
  • Curdia V., Woodford M. (2009). Conventional and unconventional monetary policy // CEPR, CEPR Discussion Paper No. 7514, October.
  • Federal Open Market Committee (2009). Minutes of the Federal Open Market Committee. April 28–29 // Available at: http://www.federalreserve.gov/monetarypolicy/files/fomcminutes20090429.pdf.
  • Federal Open Market Committee (2014). Federal Reserve issues FOMC statement. October 29 // Available at: http://www.federalreserve.gov/newsevents/press/monetary/20141029a.htm.
  • Gagno J., Raskin M., Remache J., Sack B. (2010). Large-Scale Asset Purchases by the Federal Reserve: Did They Work? // Federal Reserve Bank of New York, Staff Report no. 441. Available at: http://www.newyorkfed.org/research/staff_reports/sr441.pdf.
  • Hancock D., Passmore W. (2010). Did the Federal Reserve’s MBS Purchase Program Lower Mortgage Rates? // Board of Governors of the Federal Reserve System, Washington, DC 20551. Available at: http://www.federalreserve.gov/pubs/feds/2011/201101/201101pap.pdf.
  • International Monetary Fund (2013). Unconventional monetary policies—recent experience and prospects // IMF, August.
  • King M. (1999). Challenges for Monetary Policy: New and Old // New Challenges for Monetary Policy, Kansas City, Federal Reserve Bank of Kansas City, pp. 11–57.
  • Neely C. (2012). The Large-Scale Asset Purchases Had Large International Effects // Federal Reserve Bank of St. Louis, Working Paper No. 2010-018D.
Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606