I see no a priori way to answer the question of whether a central-bank policy of holding the money supply constant, limiting the liquidity of the money market, or raising the discount rate at the first sign of euphoric speculation would prevent mania leading to crisis, or correct it after it got under way. Moreover, economics cannot conduct carefully controlled experiments. Nor can appeals to history settle the issue exclusively..
- Charles Kindleberger, "Manias, Panics and Crashes"
No comments:
Post a Comment