In Across the Great Divide: New Perspectives on the Financial Crisis, Taylor and Baily Bring Forth Differing Viewpoints to Examine the Financial Crisis of 2008 and How to Avoid Future Crises

Tuesday, October 28, 2014
Across the Great Divide: New Perspectives on the Financial Crisis

The Hoover Institution Press and Brookings Institution today released Across the Great Divide: New Perspectives on the Financial Crisisedited by Hoover Institution Senior Fellow John Taylor and Brookings Institution Senior Fellow Martin Neil Baily. 

This thoughtful work was written scholars, policy makers, and practitioners who met at the Hoover Institution and the Brookings Institution to discuss the financial crisis of 2008: its causes, effects on the US economy, and the way ahead.

Across the Great Divide: New Perspectives on the Financial Crisis
Across the Great Divide: New Perspectives on the Financial Crisis, edited by Hoover Institution Senior Fellow John Taylor and Brookings Institution Senior Fellow Martin Neil Baily.

“The title of the book is symbolic as it reflects the range of different groups and opinions brought together, including, for example, those who have been harshly critical of the Federal Reserve Board and those who have given high marks to the Fed’s rescue efforts and unusual policy measures,” said John Taylor, senior fellow at the Hoover Institution.

The financial crisis of 2008 devastated the American economy and caused US policy makers to rethink their approaches to major financial crises. More than six years have passed since the collapse of Lehman Brothers, but questions persist about the best ways to avoid, and respond to, future financial crises. In Across the Great Divide, contributing economic and legal scholars from academia, industry, and government analyze the role played by the Federal Reserve, the concept of too big to fail, and resolution frameworks. Along the way, they highlight the need for policies that can help us avoid, and respond to, future crises.

“Monetary and economic policy are areas where we need continuity and stability . . . they shouldn’t sway with changes in Congress and the White House,” says Martin Neil Baily, senior fellow at the Brookings Institution.  “Brookings and Hoover were proud to have brought together a range of scholars who embrace different politics and economic philosophies.”

The expert contributors consider post-crisis regulatory policy reforms and emerging financial and economic trends, including the roles played by highly accommodative monetary policy, securitization run amok, government-sponsored enterprises, large asset bubbles, excessive leverage, and the federal funds rate. The contributors also tackle the concept of too big to fail, capital standards, subordinated debt, risk and moral hazard, macroprudential regulation, and international interconnectedness. They discuss new liquidity requirements, the role of systemically important financial institutions, and run-prone liabilities, among other topics.

There was far more agreement among participants than one would expect, according to the editors; the hope is that this book can be a useful guide as we narrow the great divide and have the courage to implement good economic policy.

EDITORS: John B. Taylor, Hoover Institution; Martin Neil Baily, Brookings Institution

CONTRIBUTORS: Sheila Bair, Alan Blinder, Michael Bordo, John Cochrane, Ricardo Delfin, Darrell Duffie, Douglas Elliott, Peter Fisher, Randall Guynn, Michael Helfer, Simon Hilpert, Allan Meltzer, Paul Saltzman, Ken Scott, George Shultz, David Skeel, Steve Strongin, Lawrence Summers, Kevin Warsh

About the Hoover Institution:  The Hoover Institution, Stanford University, is a public policy research center devoted to the advanced study of economics, politics, history, and political economy—both domestic and foreign—as well as international affairs. With its eminent scholars and world-renowned Library & Archives, the Hoover Institution seeks to improve the human condition by advancing ideas that promote economic opportunity and prosperity and secure and safeguard peace for America and all mankind.

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