The Independent Institute is out with a new book edited by our own David Beckworth: Boom and Bust Banking: The Causes and Cures of the Great Recession. David of course is one of the founding father of Market Monetarism and despite the somewhat Austrian sounding title of the book the book is primarily written from a Market Monetarist perspective.
I must stress that I have not read book yet (even though I have had a sneak preview of some of the book), but overall the book splits three ways: (1) How the Fed contributed to the housing boom, (2) How the Fed created the Great Recession, and (3) How to reform monetary policy moving forward.
Here is the book description:
“Congress created the Federal Reserve System in 1913 to tame the business cycle once and for all. Optimists believed central banking would moderate booms, soften busts, and place the economy on a steady trajectory of economic growth. A century later, in the wake of the worst recession in fifty years, Editor David Beckworth and his line-up of noted economists chronicle the critical role the Federal Reserve played in creating a vast speculative bubble in housing during the 2000s and plunging the world economy into a Great Recession.
As commentators weigh the culpability of Wall Street’s banks against Washington’s regulators, the authors return our attention to the unique position of the Federal Reserve in recent economic history. Expansionary monetary policy formed the sine qua non of the soaring housing prices, excessive leverage, and mispricing of risk that characterized the Great Boom and the conditions for recession.
Yet as Boom and Bust Banking also explains, the Great Recession was not a inevitable result of the Great Boom. Contrary to the conventional wisdom, the Federal Reserve in fact tightened rather than loosened the money supply in the early days of the recession. Addressing a lacuna in critical studies of recent Federal Reserve policy, Boom and Bust Banking reveals the Federal Reserve’s hand in the economy’s deterioration from slowdown to global recession.
At the close of the most destructive economic episode in a half-century, Boom and Bust Banking reconsiders the justifications for central banking and reflects on possibilities for reform. With the future ripe for new thinking, this volume is essential for policy makers and concerned citizens”
Other founding fathers of Market Monetarism such as Scott Sumner, Nick Rowe, Josh Hendrickson and Bill Woolsey all have also contributed to the book. Furthermore, there are chapters by other brilliant economists such as George Selgin, Larry White and Jeff Hummel.
I think it is very simple – just buy the book NOW! (Needless to say my copy is already ordered).