Buy "The Great Recession: Market Failure or Policy Failure"
It official! Bob Hetzel's book "The Great Recession: Market Failure or Policy Failure" is finally out. Buy it! Needless to say I ordered it long ago. We all know it - Bob Hetzel has a Market Monetarist explanation for the Great Recession. It was caused by overly tight monetary policy - what Bob calls the Monetary Disorder view of the Great Recession. John Taylor has a favourable review of the book here. David Beckworth comments on Taylor here. Scott Sumner comments on Hetzel, Taylor and Beckworth. And finally Bill Woolsey also has a wrap-up on Hetzel, Taylor, Beckworth and Sumner (and Marcus Nunes for that matter). Do I need to add anything? Well no, other than just buy that book NOW!! Here is that official book description: “Since publication of Robert L. Hetzel’s The Monetary Policy of the Federal Reserve (Cambridge University Press, 2008), the intellectual consensus that had characterized macroeconomics has disappeared. That consensus emphasized efficient markets, rational expectations, and the efficacy of the price system in assuring macroeconomic stability. The 2008-2009 recession not only destroyed the professional consensus about the kinds of models required to understand cyclical fluctuations but also revived the credit-cycle or asset-bubble explanations of recession that dominated thinking in the 19th and first half of the 20th century. These “market-disorder” views emphasize excessive risk taking in financial markets and the need for government regulation. The present book argues for the alternative “monetary-disorder” view of recessions. A review of cyclical instability over the last two centuries places the 2008-2009 recession in the monetary-disorder tradition, which focuses on the monetary instability created by central banks rather than on a boom-bust cycle in financial markets.” ---- UPDATE: David Glasner also has a comment related to Taylor-Hetzel.