Greenspan's Conundrum and Bernanke's Nightmare

Darden Business Publishing Cases

ISSN: 2474-7890

Publication date: 20 January 2017

Abstract

At what point in the tepid recovery from the global financial crisis should the Fed take a major step in normalizing U.S. monetary policy by greatly reducing its holdings of U.S. Treasury bonds? Federal Reserve Board Chairman Ben Bernanke faced this question in Spring 2012, even as he was concerned that the U.S. economy was on weaker footing than many believed. Suitable for both core and elective MBA courses in global financial markets and international finance, this case examines the risks associated with a policy some would consider monetizing the budget deficit. Students consider the factors behind the current and prospective levels of U.S. long-term interest rates from Bernanke's perspective.

Keywords

Citation

Warnock, F. (2017), "Greenspan's Conundrum and Bernanke's Nightmare", Darden Business Publishing Cases. https://doi.org/10.1108/case.darden.2016.000144

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Publisher

:

University of Virginia Darden School Foundation

Copyright © 2009 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved.

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