Financial Market Turmoil and U.S. Macroeconomic Performance

Description:

Lending in credit markets requires confidence in the borrowers' ability to repay the debt (principal and interest) in full and on schedule. The current turmoil in U.S. financial markets is the result of a breakdown in that necessary confidence. A number of indicators have pointed to a substantial rise in the cost of credit and a decrease in the flow of credit to the broader economy. Economic policy may be needed to get credit flowing smoothly again and to mitigate the damage incurred by households and non-financial businesses. Three types of policy response exist and are being applied in varying degrees. This report discusses each of these policy responses.

Creator(s): Elwell, Craig K.
Creation Date: June 9, 2009
Partner(s):
UNT Libraries Government Documents Department
Collection(s):
Congressional Research Service Reports
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Creator (Author):
Elwell, Craig K.

Specialist in Macroeconomic Policy

Publisher Info:
Place of Publication: Washington, D.C.
Date(s):
  • Creation: June 9, 2009
Description:

Lending in credit markets requires confidence in the borrowers' ability to repay the debt (principal and interest) in full and on schedule. The current turmoil in U.S. financial markets is the result of a breakdown in that necessary confidence. A number of indicators have pointed to a substantial rise in the cost of credit and a decrease in the flow of credit to the broader economy. Economic policy may be needed to get credit flowing smoothly again and to mitigate the damage incurred by households and non-financial businesses. Three types of policy response exist and are being applied in varying degrees. This report discusses each of these policy responses.

Physical Description:

20 pages.

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Partner:
UNT Libraries Government Documents Department
Collection:
Congressional Research Service Reports
Identifier:
Resource Type: Report
Format: Text