How the Great Recession Was Brought to an End?

A new working paper entitled “How the Great Recession Was Brought to an End“, by Princeton’s Alan Blinder and Mark Zandi of Moody’s Analytics, was released two days ago. In his blog posting entitled “The Impact of Another Kind of Stimulus”, New York Times reporter David Leonhardt characterizes it as “…the first serious attempt at analyzing the effect both of the stimulus programs passed by Congress and of the various financial-market policies put in place by the Fed, the Treasury and Congress” and summarizes some highlights of their analysis.  Yesterday, the New York Times published an article about the Blinder-Zandi paper entitled “In Study, 2 Economists Say Intervention Helped Avert a 2nd Depression” and also quotes Stanford professor John B. Taylor as saying that Blinder and Zandi’s empirical results were quite different from his own empirical work on the policy responses to the crisis.  Today, Professor Taylor provides a detailed critique of the Blinder-Zandi paper on his blog (see “More on the Blinder-Zandi Working Paper on the Crisis”).  Anyway, an interesting and very public academic debate is unfolding here which obviously has critically important policy implications; there’s a lot here to “chew” on!