April 2, 2014
In the last portion of the presentation, Lucas examines the nature of financial crises. The fundamental duty of a central bank, he says, is to avoid sudden deflations. In the 1930s, runs on uninsured bank deposits caused the problem. In 2008, it was what Lucas refers to as a "run on repo"—in this case, it mimicked a bank run, but it was tied to the liquid assets that were created by the financial services sector.
The Homer Jones Memorial Lecture Series honors those who exemplify the highest qualities of leadership in economics and public policy. As research director, and later as senior vice president at the St. Louis Fed, Homer Jones (1906-1986) played a major role in developing the Bank as a leader in monetary research and statistics.
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