David Beckworth on Money, Monetary Policy, and the Great Recession

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4.7 • 4.4K Ratings

🗓️ 30 May 2016

⏱️ 64 minutes

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Summary

Was the Financial Crisis of 2008 caused by a crisis in the housing market? Or did the Federal Reserve turn a garden-variety recession into the Great Recession? David Beckworth of Western Kentucky University talks with EconTalk host Russ Roberts about the Fed's response to the recession that began in December of 2007 and worsened in 2008. Beckworth argues that the Fed failed to respond adequately to the drop in nominal GDP by keeping interest rates too high for too long. Beckworth describes what he thinks the Fed should have done and the lessons we should learn going forward to reduce the severity of future downturns.

Transcript

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0:00.0	Welcome to Econ Talk, part of the Library of Economics and Liberty.
0:09.2	I'm your host, Russ Roberts, of Stanford University's Hoover Institution.
0:13.7	Our website is econtalk.org where you can subscribe, comment on this podcast, and find
0:18.8	links and other information related to today's conversation.
0:21.7	You'll also find our archives where you can listen to every episode we've ever done going
0:26.0	back to 2006.
0:28.2	Our email address is mailadycontalk.org.
0:30.7	We'd love to hear from you.
0:34.6	Today is May 19, 2016, and my guest is David Beckworth of Western Kentucky University.
0:41.4	We are taping this in front of a live audience at the Kato Institute, where David is an
0:45.2	adjunct scholar, and this event is part of Kato Center for Monetary and Financial
0:49.7	Alternatives.
0:50.7	David, welcome to Econ Talk.
0:52.8	Thank you for having me on.
0:54.4	You've written a lot of provocative things about the Great Recession, the role of the Fed,
0:58.4	and trying to understand what happened.
1:00.2	That's going to be our main focus today.
1:02.2	I'm sure we'll get into a lot of other related issues.
1:05.5	A lot of people blame the collapse of the housing market for the Great Recession, and see
1:10.6	that they may disagree about whose fault that is, whether it's the government or the private
1:15.7	sector, run a mock.
1:17.4	I was like that phrase.
	...

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