Wednesday, March 11, 2009

What Casued the Financial Crisis?

Did the Federal Reserve Cause the Housing Bubble and the Subsequent Financial Crisis?

Some economists think that the Fed played a role:

( Recall the application of the supply and demand for loanable funds from Chapter 8 relates to this point of view)

See here ( Wall Street Journal) here ( WSJ)
and here ( Ludwig von Mises Institute)

Alan Greenspan, Former Federal Reserve Chairman doesn't think so:

see here ( Wall Street Journal)

For a visual explanation see the following video:

Part 1

Part 2