The success of Beijing's overwhelming fiscal and monetary response to the global credit crunch has bolstered the confidence of state planners and put advocates of freer markets on the defensive.
In the bloody tumult of the West Bank and the Gaza Strip, the dry number-crunching of the International Monetary Fund might seem like an academic exercise at best, or at worst an insensitive distraction.
This is partly because some traditional remedies, such as looser monetary policy, are weakened in a credit crunch.
A confidential assessment of Afghan finances by the International Monetary Fund said the potentially severe cash crunch was caused by widespread tax evasion abetted by government officials, the increasing theft of customs revenues by provincial governors and softening economic growth.
While he reined in domestic outlays and the Federal Reserve initiated a bone-crunching, inflation-killing bout of monetary tightness, Washington also enacted massive income tax rate cuts and an array of pro-growth deregulatory measures.
All this, on the back of two years of tightening monetary policy, has brought India its own credit crunch.In response, since mid-September, the RBI has been trying to boost liquidity.
It did not rush to cut interest rates to limit the fallout from the credit crunch, but the ECB was still tightening monetary policy when the crunch started in earnest.
He shows that simple extensions of standard monetary models help rationalize the implications of the liquidity crunch, and then examines slightly more technical models that highlight liquidity issues.
The European Central Bank, the Bank of England and the International Monetary Fund have all recently warned of a looming crunch, especially in Europe, where banks have enough trouble raising money as it is.
Three years on and with another credit crunch looming, Adam Posen of the Bank of England's monetary policy committee is calling for the Bank to intervene directly to unblock lending.
LONDON — The European Central Bank took further steps Wednesday to ease a cash crunch at the Continent's banks, as the International Monetary Fund warned that the sovereign debt crisis would require a huge increase in bank reserves.
