Fed liquidity helped US escape Great Recession: NY Fed paper
The Federal Reserve's liquidity policies had a quantitatively large effect on monetary markets and enabled the US economy to escape a repeat of the Great Depression, says a New York Federal Reserve paper, published on Tuesday.
Marco Del Negro, Gauti Eggertsson, Andrea Ferrero and Nobuhiro Kiyotaki, the paper's authors, introduce liquidity frictions into a standard dynamic stochastic general equilibrium model with nominal and real rigidities, to examine whether a shock to the liquidity of private
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