Jun 11, 2018
There's a certain natural response of central banks to see a disaster, go "Oh no, the world is a dangerous place!" and tighten monetary policy at the very time they need to relax it. Reading a book on the history of the Guilded Age now and the Bank of England did this in 1873. The US didn't get the Fed until '19 but the US tightned the gold standard in Panic of 1893. I think people setting monetary policy mostly learned this lesson by the 20th century but even today you see things like Japan deciding to increase its gasoline reserve rather than release it in response to the Tsunami. So I suppose its good for people in positions like that to think through what they're going to do ahead of time if disaster strikes.
