Document Type
Article
Publication Date
2-2021
Publication Title
Journal of Policy Modeling
Volume
43
Issue
1
Pages
15-33
Publisher Name
Elsevier
Abstract
The paper formulates the modeling of unconventional monetary policy and critically evaluates its effectiveness to address the Global Financial Crisis. We begin with certain principles guiding general scientific modeling and focus on Milton Friedman's 1968 Presidential Address that delineates the strengths and limitations of monetary policy to pursue certain goals. The modeling of monetary policy with its novelty of quantitative easing to target unusually high unemployment is evaluated by a Markov switching econometric model using monthly data for the period 2002–2015. We conclude by relating the lessons learned from unconventional monetary policy during the Global Financial Crisis to the recent bold initiatives of the Fed to mitigate the economic and financial impact of the Covid-19 pandemic on U.S. households and businesses.
Recommended Citation
Bhar, Ramaprasad and Malliaris, A. (Tassos) G.. Modeling U.S. Monetary Policy During the Global Financial Crisis and Lessons for Covid-19. Journal of Policy Modeling, 43, 1: 15-33, 2021. Retrieved from Loyola eCommons, School of Business: Faculty Publications and Other Works, http://dx.doi.org/10.1016/j.jpolmod.2020.07.001
Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.
Copyright Statement
© Elsevier, 2021.
Comments
Author Posting © Elsevier, 2021. This is the author's version of the work. It is posted here by permission of Elsevier for personal use, not for redistribution. The definitive version was published in Journal of Policy Modeling, Volume 43, Issue 1, January-February 2021. https://doi.org/10.1016/j.jpolmod.2020.07.001