Last night I “voted” for Christy Romer to the Fed Board. Her newest paper puts some stars on the vote! In “NEW EVIDENCE ON THE IMPACT OF FINANCIAL CRISES IN ADVANCED COUNTRIES” she concludes:
But our finding that there is substantial variation in outcomes suggests different questions. Are there policies that can be undertaken in normal times not just to reduce the chances of crises, but to make their consequences less grave if they occur? What policy actions when a crisis occurs—in addition to steps to lessen the crisis and resolve it quickly—could minimize its effects? The answers to these questions are important for ensuring not just that each time is different, but that none is terrible.
To those questions she has already sketched an answer.