Duca, John V.; Murphy, Anthony - In: Economics Letters 119 (2013) 3, pp. 351-353
In 2008, US corporate bond spreads almost reached Great Depression levels. The Fed was a lender of last resort in commercial paper, but not corporate bonds. The Fed’s FRB/US macroeconomic model is used to simulate the effects of the Fed successfully capping the BBB-10 year Treasury spread at...