In the succeeding decades, fiscal policy became the weapon of choice when dealing with economic downturns, whether caused by crises or not.
Fiscal policy:
(a) direct fiscal stimulus
(b) tax cuts and rebates
(c) transfer payment
Fiscal policy is not a free lunch.
crowding-out effect, and Ricardian Equivalence, certain kinds of fiscal measures can spur demand in the present at the cost of demand in the future.
gov.t guarantee
(1) deposit insurance
A systemic crisis in the banking system can easily overwhelm funds set aside to meet the occasional failure
page 167
capital injection (page 169) how the banks function
Banks raise money by issuing shares and borrowing money from a range of lenders. Bank loans money to accumulate assets.
How much is the bank worth? The difference between the value of the assets and the value of the debt liabilities. (page 170)
page 173-175 for ways to cope with asset problems
page 179 highlighted
No comments:
Post a Comment