Joseph Stiglitz: evaluation

Transcript context

…You think it’s credit? Or you think it’s real factors at this point in time? I think what matters is not the money supply, not the interest rate; it’s the credit availability of monetary policy, so it’s the mechanism. What we saw in 2008 — that providing so much liquidity to the banking system didn’t help that much, that the banks were very reluctant to lend out that money. Therefore, the recovery was a very slow recovery. We would have been better off if we had relied more on fiscal policy than on monetary policy. That, I think, is maybe, from an analytic point of view, the main distinction that I think I’ve discovered in our work. Now, your best-cited piece is your 1981 article with Andy Weiss on credit rationing, which is a macroeconomic idea. But do you think that since then, the real problem has more often been that we’ve thrown too much credit at things? So, the housing bubble, the student loan crisis — wouldn’t we have been better off with a lot more credit rationing?…

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