Archive for 17 March 2008
Fed Intervention Policy
| Steve Phelan |
Greg Mankiw reports that Myron Scholes has a novel idea to fix the credit crisis – rather than simply guaranteeing to underwrite asset losses (as they have with the JP Morgan/Bear Stearns ) Scholes proposes that the Fed takes senior equity and debt positions in a distressed bank thereby improving the capital adequacy ratio, and thus preventing a credit freeze which would damage the real economy. I like it – what do YOU think?
Debt Bites Back
| Steve Phelan |
A nice cartoon presentation of the debt crisis by the Wasington Post that you might want to use in your classes.
Two questions:
1) Is the story essentially correct or is it overly damning?
2) What are the organizational implications of this story – for institution and policy building?
We can only assume that all sorts of “corrective” measures will be planned and taken in the immediate future. I believe we should be getting involved in the debate by honing our theoretical position. We are watching economic history in the making.
Organizations and Markets 
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