Oct 22, 2008
Four Myths About the Financial Crisis
Three economists from the Minneapolis Federal Reserve have just released a working paper on"Myths About the Financial Crisis of 2008." Finally, some common sense! They identify and refute four myths:
1. The myth that bank lending to nonfinancial corporations and individuals has declined sharply.
2. The myth that interbank lending is essentially nonexistent.
3. The myth that commercial paper issuance by nonfinancial corporations has declined sharply and rates have risen to unprecedented levels.
4. The myth that banks play a large role in channeling funds from savers to borrowers.
The paper is reported on in two blogs, those of Alex Tabarrok and Arnold Kling, and they both provide links to a pdf copy of the paper itself.
Hat tip to David Henderson for alerting me to this major development.
1. The myth that bank lending to nonfinancial corporations and individuals has declined sharply.
2. The myth that interbank lending is essentially nonexistent.
3. The myth that commercial paper issuance by nonfinancial corporations has declined sharply and rates have risen to unprecedented levels.
4. The myth that banks play a large role in channeling funds from savers to borrowers.
The paper is reported on in two blogs, those of Alex Tabarrok and Arnold Kling, and they both provide links to a pdf copy of the paper itself.
Hat tip to David Henderson for alerting me to this major development.