Category Archives: Financial Crisis

Across the Great Divide: New Perspectives on the Financial Crisis

A year ago today, the Hoover Institution and the Brookings Institution held an unusual joint conference on the financial crisis, where twenty-four economists and legal scholars reexamined the crisis, its effect on the US economy, and possible policy reforms. The … Continue reading

Posted in Financial Crisis, Slow Recovery

Should Policymakers or Macro Models Be Taken to the Woodshed?

There’s a good debate going on about the usefulness of macro models, and in particular whether the so-called New Keynesian models let us down or even helped bring on the financial crisis and the Great Recession. This weekend Noah Smith … Continue reading

Posted in Financial Crisis, Teaching Economics

Krugman’s Slack

In a piece yesterday, Paul Krugman disagrees with my assessment that there was more overheating than slack in the economy in the years leading up to the 2007-09 recession and financial crisis. That assessment was one part of a broader … Continue reading

Posted in Financial Crisis, Slow Recovery

More on “It’s Extreme Policies Not Extreme People”

I argue in the Wall Street Journal today that a huge shift to extremely interventionist economic policies in recent years rather than a shift to extremist positions is the source of the recent political clashes and governance crises in the … Continue reading

Posted in Financial Crisis

A Candid Exchange of Different Views of the Crisis

Yesterday the Hoover Institution and the Brookings Institution held an unusual joint conference on “The U.S. Financial System – Five Years after the Crisis.”   Roughly half the participants were at the Hoover venue in Stanford, California and half were at … Continue reading

Posted in Financial Crisis

Detecting the Source of Our Recent Poor Economic Performance

I have been arguing that highly discretionary (versus rules-based) macro policy provides the best explanation for generally poor macroeconomic performance, such as recent years, in comparison with periods of good performance, such as the 1980s and 1990s.  This was the … Continue reading

Posted in Financial Crisis, Monetary Policy, Slow Recovery

A Crisis May Be Worst Time to Deviate from Rules

In the Money interview with me which Melissa Francis posted yesterday she delved into two of my First Principles—the importance of the rule of law and rules-based policy—pointing out that many people argue that in an economic crisis we need to suspend the rules … Continue reading

Posted in Financial Crisis

Why Title II of Dodd-Frank Has Not Reduced the Likelihood of Bailouts

Today the House Financial Services Subcommittee on Oversight and Investigations held a hearing on whether the Orderly Liquidation Authority (OLA) in Title II of the Dodd Frank Act has reduced the likelihood of bailouts of large financial firms. I was one … Continue reading

Posted in Financial Crisis

Five-Year Anniversary of the End of the Great Moderation

Five years ago this month the Great Moderation ended. To be precise December 2007 is the month that the NBER business cycle dating committee designated as the peak of the third and final expansion of the Great Moderation and the … Continue reading

Posted in Financial Crisis

Getting Off Track and the Panic of 2008 Revisited

In a recent blog Paul Krugman, borrowing from the Economics of Contempt, takes on John Cochrane and me for our interpretations of the events leading up to the panic of 2008, and in particular my point that it was not the … Continue reading

Posted in Financial Crisis