27.9.08

MAINLY MACROECONOMICS. Econ Log continues to follow developments in the financial system bailout, or workout, or restructuring, or gridlock. Go here for comments on a Harvard faculty roundtable. Go here for reaction to the Questions of the Day.
Why, if we don't act this weekend, will we get the Great Depression? I don't think that what has happened so far is going to do it. Do we really think that the lagged response of spending to the increase in liquidity preference that has already taken place will be that large?
King Banaian at SCSU Scholars notes the history as well as the tradeoffs involved.

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