MIT Economists Propose Fed Gets Into CDS

21 Aug 2009

Two economists from the Massachusetts Institute of Technology are proposing that the Federal Reserve sell credit default swaps as a way of helping prevent any future crisis.

Two economists from the Massachusetts Institute of Technology are proposing that the Federal Reserve sell credit default swaps as a way of helping prevent any future crisis. Ricardo Caballero and Pablo Kurlat, in a paper presented at a Fed symposium in Wyoming, asserted default insurance is “an effective ...

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