The Financial Crisis and the Policy Responses: An Empirical Analysis of What Went Wrong
John B. Taylor,John B. Taylor +1 more
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In this paper, an empirical investigation of the role of government actions and interventions in the financial crisis that flared up in August 2007 is presented, integrating and summarizing several ongoing empirical research projects with the aim of learning from past policy.Abstract:
This paper is an empirical investigation of the role of government actions and interventions in the financial crisis that flared up in August 2007. It integrates and summarizes several ongoing empirical research projects with the aim of learning from past policy. The evidence is presented in a series of charts which are backed up by statistical analysis in these research projects.read more
Figures
Figure 12. Evidence of the Crisis Worsening Dramatically Fourteen Months after It Began 
Figure 13. Event Study of the Dramatic Worsening of the Crisis 
Figure 7. The Libor–OIS Spread During the First Year of the Crisis 
Figure 10. The Rebates Increased Income, But Not Consumption. 
Figure 2. The Boom-Bust in Housing Starts Compared With the Counterfactual. (The line with shorter dashes shows model simulations with the actual interest rate.) 
Figure 4. Housing Investment Versus Deviations From the Taylor Rule in Europe (Source: See footnote 3.)
Citations
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Corporate governance in the 2007–2008 financial crisis: Evidence from financial institutions worldwide
TL;DR: In this paper, the influence of corporate governance on financial firms' performance during the 2007-2008 financial crisis was investigated using a unique dataset of 296 financial firms from 30 countries that were at the center of the crisis.
Economic freedom of the world
TL;DR: The EFW index as discussed by the authors ranks countries around the world based on policies that encourage economic freedom, and places Australia at number 10 in the list of countries with the highest economic freedom.
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Macroprudential policy – a literature review
TL;DR: The recent financial crisis has highlighted the need to go beyond a purely micro approach to financial regulation and supervision and the number of policy speeches, research papers and conferences that discuss a macro perspective on financial regulation has grown considerably.
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Bank Risk-Taking, Securitization, Supervision and Low Interest Rates: Evidence from the Euro Area and the U.S. Lending Standards
TL;DR: The authors found that low monetary policy short-term interest rates soften standards, especially for mortgages, for household and corporate loans, and that this softening is amplified by securitization activity, weak supervision for bank capital and too low for too long monetary policy rates.
Journal ArticleDOI
'Real Time' Early Warning Indicators for Costly Asset Price Boom/Bust Cycles: A Role for Global Liquidity
Lucia Alessi,Carsten Detken +1 more
TL;DR: In this paper, the authors test the performance of a host of real and financial variables as early warning indicators for costly aggregate asset price boom/bust cycles, using data for 18 OECD countries.
References
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A Black Swan in the Money Market
TL;DR: This article showed that increased counterparty risk between banks contributed to the rise in spreads and found no empirical evidence that the TAF has reduced the widening spreads. But they did not consider the effect of the TFA on the spread of the OIBR.
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Housing and monetary policy
TL;DR: In this article, a counterfactual simulation with a simple model of the housing market shows that this deviation may have been a cause of the boom and bust in housing starts and inflation in the last two years.
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Globalization and Monetary Policy: Missions Impossible
TL;DR: Taylor as mentioned in this paper examined three such missions impossible in the area of globalization and monetary policy and found that the connection between the theory, the policy, and the results is not obvious, but speculating about the connection is intriguing.
Posted Content
Globalization and Monetary Policy: Missions Impossible
TL;DR: Taylor as discussed by the authors examined three such missions impossible in the area of globalization and monetary policy and found that the connection between the theory, the policy, and the results is not obvious, but speculating about the connection is intriguing.