Economics Working Paper 18116
Abstract: This paper reassesses empirical findings about the causes of the 2008 financial crisis in the light of research and events during the past 10 years. My original assessment, made a decade ago, was that empirical research “strongly suggests that specific government actions and interventions should be first on the list of answers” to the question “what caused the financial crisis?” Empirical studies with newer data, longer time periods, more countries, and different statistical or economic modelling techniques confirms that original assessment. The paper focuses on monetary policy. Other government actions possibly causing the crisis include deviations from existing prudential regulatory rules and interventions by Fannie Mae and Freddie Mac.