This paper shows that the monetary policy paradigm that was in place before the financial crisis worked very well and that the crisis occurred only after policy makers deviated from that paradigm. The paper also evaluates monetary policy during the financial crisis by dividing the crisis into...

What caused the financial crisis -- What prolonged the crisis -- Why the crisis worsened dramatically a year after it began -- What went right in the two decades before the crisis -- Why a black swan landed in the money market in August 2007

This paper shows that the monetary policy paradigm that was in place before the financial crisis worked very well and that the crisis occurred only after policy makers deviated from that paradigm. The paper also evaluates monetary policy during the financial crisis by dividing the crisis into...