Benn Steil

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Greenspan: Activism

by
March 3, 2011

In the Spring 2011 issue of International Finance, edited by CFR’s Benn Steil, former Federal Reserve Chairman Alan Greenspan argues that the economic recovery has been hampered by the exceptional level of government activism over the past two years.

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  • Posted by Andrew

    Its an interesting argument but to me it seems incomplete without including something to pick up volatility in the markets which otherwise is picked up by the volatility in government “activism”. Romer, Christina (1990) “The Great Crash and the Onset of Great Depression” shows how during the great depression the drop in stock prices created uncertainty for consumers which led to the great depression. It seems that this same mechanism could have worked during the recent crisis and without controlling for that it seems the regression could just be picking up correlations between government actions and market volatility.

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