“Bagehot’s Dictum in Practice: Formulating and Implementing Policies to Combat the Financial Crisis,” speech delivered at “Financial Stability and Macroeconomic Policy,” a symposium sponsored by the Federal Reserve Bank of Kansas City, held in Jackson Hole, Wyo., August 20–22. Reifschneider, Dave, William Wascher, and David Wilcox (2013).
As mentioned in the Bank’s “Outlook and Risk Assessment of the Economy and Prices,” released in April, monetary easing measures have effectively blocked the channels through which various shocks induce liquidity concerns, and have thereby secured financial market stability, helping to prevent the economy from falling into a deflationary spiral.