The post-WWII Federal Reserve contraction was abandoned quickly in favor of balance sheet expansion because policy makers feared a return to 1930s-style secular stagnation and deflation; modern policy should replicate this expansionary approach rather than austerity.
factualpending
Speaker
James ThorneEvidence Quote
“it was Bernani who was talking to a group, bunch of guys, and he said, Look at this is like post World War II. And what was the interesting thing about what he said is they contracted the balance sheet. They thought they were going back. They thought that they were going back to the 30s, right? They thought that they were going back to secular stagnation and deflation in the 1930s and that's why they ramped back up the the the the Fed's balance sheet”
Created: 8/11/2026, 7:42:06 AM
My Notes
Loading notes...