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Robert Murphy's Response To The Global Financial Crisis: The Calm Before The Storm

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Abstract The global financial crisis started in 2008 opened a new era for the economy managers in the developing countries and the United States. Using the conventional tools and strategies to cope with the financial crisis will not create the desired results anymore. This new experience indicates us that the economy managers and the governments need to develop more complex and detailed strategies to overcome the issues in the economies. The Federal Reserve is one of the responsible institutions for the economy management. The FED has always been blamed for not developing a proper response against the economic and financial crises in time and aiming only at the conventional goal of keeping the inflation low. In the article I discuss through this paper, some …show more content…

His past expectations were positive; however, he changed his ideas to negative because of the developing conditions in the American economy. According to him, the Federal Reserve is considered as unsuccessful responding to the economic crises in the country. The global financial crisis started in 2008 has a different characteristic. Therefore, the Federal Reserve has been expected to define the crisis and create the appropriate response to it. This time, the Federal Reserve has aimed keeping the inflation at an acceptable level at the beginning of the crisis, and then, after the government has stated that the stimulating strategies had to be implemented, the Federal Reserve has started printing money and increasing the money supply. The Federal Reserve has created its response to the crisis late again as always it has happened. The individuals were losing their trust in the American economy, and the Federal Reserve could not take the actions to lead the expectations in the economy. Following that, the Federal Reserve has decided to support the stimulating strategies of the American government by increasing the money

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