Money in the Great Recession

Reviews / Votes

'Tim Congdon has brought together a thorough coverage of the analysis, by leading academic and market economists, of the causes of the recent Great Recession. The focus is the key roles that money and financial regulation played in the recession and continue to play in the weak recovery. This is an important book that policymakers, economists, and others should read.' -- Forrest Capie, Cass Business School, City University London, UK 'The financial crisis: central bankers were the heroes, and bankers were the villains - right? Wrong, totally. To understand why, read this book, with contributions from many leading economists who study money and central banks. As Tim Congdon, the editor, points out, central bankers permitted much too fast a growth in the money supply in the run-up to the crisis. The banks had every incentive to extend too much credit. The same central bankers then allowed the money supply growth rate to crash when the crisis hit. During and after the crisis, they brought in Draconian regulations that damaged the recovery process by increasing the cost of credit creation, so sandbagging money supply growth. It is an inglorious tale. Central bankers are not godlike technocrats, but simply civil servants, whose behaviour needs to be understood in terms of flawed incentives, incentives that can generate terrible outcomes. They - like governments - need to be governed by rules that keep the economy on track without inflation.' -- Patrick Minford, Cardiff University, UK