巴德 宏观经济学原理（英文版·第8版）Chapter 17 Eye Ons.pptxVIP

17EYE ONSMonetary Policy The story of the Great Depression is complex and even today, after almost 80 years of research, economists are not in full agreement on its causes. But one part of the story is clear and it is told by Milton Friedman and Anna J. Schwartz:The Fed got it wrong. An increase in financial risk drove the banks to increase their holdings of reserves and everyone else to lower their bank deposits and hold more currency.Between 1929 and 1933, the banks’ desired reserve ratio increased from 8 percent to 12 percent and …the currency drain ratio increased from 9 percent to 19 percent. The money multiplier fell from 6.5 to 3.8.The quantity of money crashed by 35 percent.This massive contraction in the quantity of money was accompanied by a similar contraction of bank loans.A large number of banks failed. Friedman and Schwartz say that this contraction of money and bank loans and the failure of banks could (and should) have been avoided by a more alert and wise Fed.The Fed could have accommodate the banks’ increased desired reserve ratio and …offset the rise in currency holdings as people switched out of bank deposits. Bernanke did what Friedman and Schwartz said the Fed needed to do.At the end of 2008, the Fed flooded the banks with the reserves that they wanted.The money multiplier fell from 9.1 in 2008 to 2.5 in 2013—much more than it had fallen from 1929 to 1933.The quantity of money did not contract as it did in 1933. The quantity of M2 increased by 37.5 percent in the 5 years to August 2013, a 6.6 percent annual rate.We can’t be sure that the Fed averted a Great Depression in 2009.But we can be confident that the Fed’s actions helped to limit the depth and duration of the 2008–2009 recession. In 2013, the “dual mandate” put the Fed in a dilemma.The recovery was slow and unemployment was not falling quickly enough.The Fed’s dilemma was when to stop fighting the slow recovery and start worrying about unleashing inflation. The Taylor RuleFigure