MONETARY POLICY

Monetary Policy and Financial Crisis

Monetary Policy and Financial Crisis

The financial crisis in the US was caused by the sub-prime crisis. It jeopardized the US economy and resulting in the bursting of an economic bubble that had been built as a result of the error-riddled estimation of investment risk (Shaw & Liu, 2011; Helleiner, Pagliari, & Zimmermann, 2009). The mounting pressure of internal debt eventually formed a circular debt structure that compromised the foundations of the US economy and brought it into a position where there was no other option but to take desperate measures so that the main parts of ...