Wirtschafts- und Wirtschaftsjournal

Recent Major Fed Errors and Better Alternatives

Abstract

Allan H Meltzer

This paper discusses a central issue about the recent slow recovery. Why did enormous, unprecedented monetary stimulus have such a small response? The Fed made three major errors. It failed to recognize that the principal economic problems were real, not monetary. It focused excessively on short-term data, and failed to develop a useful strategy. And it ignored changes in money and credit, The Obama administration caused the principal real problems by imposing costly regulation, and an approach to business that the Economist called “The Criminalization of American Business.”