Here, Nobel Laureate in Economics Vernon Smith introduces his colleague Steve Gjerstad on why the Fed’s early-in-the-millennium policy to induce a housing bubble “went awry”:
Smith and Gjerstad are working on a book on the Great Recession, and Gjerstad provides, here, a data-heavy discussion, and uses that data to show why Keynesian policy doesn’t work. Gjerstad makes an especially interesting comparisons between Japan and Finland. Well worth sitting through the whole lecture.