Understanding the Global Demand Collapse: Empirical Analysis and Optimal Policy Response

Guido Cazzavillan and Michael Donadelli

No 2010_18, Working Papers from Department of Economics, University of Venice "Ca' Foscari"

Abstract: The goal of this project is to deeply investigate on the main causes of the global economic and financial crises and, based on a theoretical framework, to describe a suitable optimal monetary policy. According to our empirical analysis (basically based on US data) we will prove that a mix of extraordinary conditions have been crucial for the origin, develop and growth of the recent crisis. In finding what has been the main cause of such collapse we will prove that the credit crunch has played a crucial role, especially as a sort of contractionary monetary policy. We will also discuss the quantitative easing policies implemented by the Central Banks. Finally, we will seek to establish, by using an existing theoretical model and given extraordinary market conditions, in what central banks were wrong, and if so, where they made mistakes.

Keywords: Economic and Financial Crisis; Credit Crunch; Optimal Monetary Policy (search for similar items in EconPapers)
JEL-codes: E01 E41 E44 E52 E58 E61 G01 G15 (search for similar items in EconPapers)
Pages: 55
Date: 2010
New Economics Papers: this item is included in nep-cba and nep-mac
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ven:wpaper:2010_18

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