Faith in Fiscal Stimulus
October 09, 2011 at 06:59 AM EDT
Suppose there was a huge stock market crash that destroyed lots of wealth. Would it reduce AD? One would think so, and some might cite the 1929 crash. But the Fed reduced the monetary base between October 1929 and October 1930 at one of the fastest rates of the 20th century. So perhaps tight money [...]
