Bordo, Michael D. - In: Journal of Economic Dynamics and Control 49 (2014) C, pp. 126-134
The Federal Reserve was established in 1913 to be a lender of last resort. Paul Warburg, its principal architect had in mind that a U.S. central bank would follow Bagehot׳s strictures ‘to lend freely at a penalty rate’ in the face of a scramble for high powered money. Yet the Federal...