macro book review

             The title of this book by Alan S. Blinder and Janet L. Yellen indicates the extent to which the authors found the 1990s US economic boom a spectacular success. Blinder and Yellen provide much personal insight for what they describe as the main reasons for what they refer to as "The Fabulous Decade". Having both been members of the board of the Fed with Chairman Alan Greenspan, and also members of Bill Clinton's administration, they are well-acquainted with all of the decisions that had to made during Clinton's eight years in the White House. The authors state three main reasons, the policy mix of a tight fiscal policy and a loose monetary policy, the restructuring of business that occurred, and the fine tuning of rates by Fed Chairman Alan Greenspan, for the macroeconomic boom that occurred during the last decade. As understanding as they were about the workings of the policy-making bodies, the authors neglected to touch on a few important things, some that would indicate that Clinton's fabulous success with the economy was not nearly as spectacular as they would have liked to believe.
             Being members of the board of the Fed as well as the Clinton administration, it is natural for Blinder and Yellen to give credit to the President and Alan Greenspan for the success of the economy. They even declare "Greenspan as the greatest fine-tuner in history."(Blinder,Yellen 85). After watching apparently unprecedented economic growth as a result of many of the decisions they made, it is ordinary for one to credit those pulling the strings. However, their obsession with the Fed might have been slightly misguided. In their analysis, curiously, not only did Blinder and Yellen barely mention the stock market boom at all, but they gave no credit to its unprecedented rise as one of the elements of the economic advance as a whole.
             The impacts of stock market bubble that emerged during the 1990s were felt far beyon...

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