Successes and Drawbacks of the Federal Reserve and the Impact on Financial Markets.

Rashid, Muhammad Mustafa (2018): Successes and Drawbacks of the Federal Reserve and the Impact on Financial Markets.

Abstract

The purpose of this paper is to provide an outline of the success and draw backs of the Federal Reserve and the consequent impact on financial markets. A review of the relevant literature from Hubbard (2008) and Dowd & Hutchinson (2010) will provide insights into the success and failures of the Federal Reserve and the impact on financial markets. Further insights will be drawn from; Gorton & Metrick (2013) and their interpretation of the Federal Reserve’s actions since its formation, Romer & Romer (2013) on the pessimism of monetary policy and Dyugen-Bump (et. al 2013) on their assessment of the effectiveness of emergency liquidity measures.

• Item Type: MPRA Paper
• Language: English
• Keywords: Federal Reserve, Financial Markets, Financial Crises, Financial Regulations
• Subjects: G - Financial Economics > G0 - General; G - Financial Economics > G0 - General > G01 - Financial Crises; G - Financial Economics > G1 - General Financial Markets > G18 - Government Policy and Regulation; G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation; G - Financial Economics > G3 - Corporate Finance and Governance; G - Financial Economics > G3 - Corporate Finance and Governance > G38 - Government Policy and Regulation

References

Duygan-Bump, Burcu, Parkinson, Patrick, Rosengren, Eric, Suarez, Gustavo A., & Willen, Paul. (2013). How Effective Were the Federal Reserve Emergency Liquidity Facilities? Evidence from the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility. (Report). Journal of Finance, 68, 715.

Dowd, K., & Hutchinson, M (2010). Alchemist of Loss. West Sussex, UK: John Wiley & Sons Ltd.

Gorton, G., & Metrick, A. (2013). The Federal Reserve and Panic Prevention: The Roles of Financial Regulation and Lender of Last Resort. The Journal of Economic Perspectives, 27(4), 45-64.

Hubbard, R.G, (2008). Money, the Financial System, and the Economy 6th Edition. Boston, MA, Pearson Education, Inc.

Romer, Christina D, & Romer, David H. (2013). The Most Dangerous Idea in Federal Reserve History: Monetary Policy Doesn't Matter. American Economic Review, 103(3), 55-60.