The US economy is currently in one of the deepest economic recessions since WWII, and a self-reinforcing contraction in employment and consumption makes policy action crucial. The Federal Re-serve has already taken unprecedented steps to unlock the credit markets; further credit easing measures are likely to be implemented as credit…

The Federal Reserve (Fed) has gone beyond playing with fire, and may have indeed set the house on fire. It’s one thing to push interest rates to near zero to stimulate the economy; it’s another to “monetize the debt” by printing money to buy government debt. In recent weeks, the…

One would think that bidding adieu to such a miserable year like 2008 would be a welcome event. However, turning the calendar to 2009 has not elicited a particularly enthusiastic response. The financial markets are still a mess, recession is plaguing nearly every corner of the globe, and in many…