2. The Great Recession: Market Failure or Policy Failure? by Robert L. Hetzel
The author draws on his extensive knowledge of the Federal Reserve System and monetary history to argue that the main cause of the Great Recession of 2008-2009 was the Federal Reserve’s failure to ease monetary policy aggressively in the summer of 2008.
He explains how contractionary monetary policy turned a moderate recession caused by energy prices and housing sector shocks into a serious economic contraction.
This book is an immensely rewarding read for serious students of central banking, monetary economics, and macroeconomic performance. It will come as a surprise to many readers and challenge the conventional view that a massive financial market failure caused the recession of 2008-2009.
