Why dosent the government get the centarl bank to wait

Reference no: EM13183490

1-.Alan Greenspan,chairman of the fed ,was the leading proponent of the view that it is too difficult , and potentialy too harmfull,topop a bubble by raising interest rates..if bubble emerged, better to quickly lower interest rates to cushion the blow to the rest of economy.The current financial crisi,which began with a spike in U.S foreclosures after house prices surged ,seriously challenged that line of thinking..

a-IN retrospect , what policy should have been followed in light of the U.S. Housing bubble?Explain your reasoning ?

2- one reason for rising interest rates was the prospect of refinancing issue:a$12 billion issue matures April1,and the government is expected to seek some new money,in excess of its refinancing needs...

a-why dosent the government get the centarl bank to wait until after the refinancing before increasing intreset rates, so as to minimaize its interest costs ?

Reference no: EM13183490

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