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Are you counting the recessions caused by central banking policies being mistaken or outright wrong? There have been at least two in the USA in the past century
by twblalock 6y ago
Are you counting the recessions caused by central banking policies being mistaken or outright wrong? There have been at least two in the USA in the past century that can be directly linked to the Federal Reserve, and who knows how many in other countries.
In the USA the two are the Great Depression (which the former Fed chief Ben Bernanke has argued was largely the result of Fed policies) and the early 1980s recession caused by the Fed increasing rates in an attempt to combat inflation. (It worked, inflation dropped, but many people lost their jobs.)
- AngrySkillzz 6y agoSure, many people make that argument. The recessions happened regardless of their source. But the financial panics that preceded lenders-of-last-resort and countercyclical monetary policy were significantly more frequent and severe than anything we've seen in recent history. Edit: just noticed your edit, Bernanke never said that monetary policy caused the Great Depression, but it is the consensus view that policy was too tight during that period and exacerbated it. A mistake that no one is keen to repeat. Certainly the interest rate rises in the 80's caused a contraction, one could argue whether the subsequent recession was worth the cost of fighting inflation. I think all would agree that the stagflation that prompted that maneuver was not ideal.