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“This Time There Was No Keynes”

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Posted in 2007-08 Financial Crisis, History of economics Tagged with: , , , , ,

It’s been almost exactly seven years since a sudden and mysterious stampede among financial institutions threated a second Great Depression. The Federal Reserve Board, backed by Congress and joined by other central banks around the world, halted the systemic run, with banks demanding cash from one another, with an equally startling burst of emergency lending to all who might be threatened by withdrawals. Four desperate weeks in the autumn of 2008 have been followed by years of pain and caution. The ensuing slump was bad enough – peak unemployment of 10 percent, 5.6 million foreclosures over three years.  But had