Evidence on the Outcomes from the Financial Crisis Response

From 2007 to 2009, the U.S. government faced extraordinary threats to the functioning of the financial system and the health of the economy. In response to these threats, the government took a series of steps—many unprecedented and hence untested in terms of their efficacy—to support economic activity and employment and to maintain the financial system’s ability to provide essential services to the real economy. This chapter summarizes the policy actions undertaken in response to the crisis and reviews the evidence on the outcomes of those actions. While the causes and manifestations of the next financial crisis will almost