In three pages this paper examines Federal Reserve Chairman Alan Greenspan's intervention into the U.S. economy during this time period in an assessment of whether or not his efforts were beneficial or detrimental.
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efforts by the Fed to control the economy for interest rates. It seemed as though for the longest time, the Feds efforts to cut rates had no impact on
the economy, particularly during the period of the late 1990s. These days however, experts are concerned that the Federal Reserves zeal in cutting interest rates might have actually lead
to the economic downfall. (Delong 60). Experts note that for the most part Alan
Greenspan -- the Feds chair -- was able to negotiate a variety of financial hurdles throughout the 1990s including the federal budget deficits and the high-tech revolution (Delong 60).
During the early 90s, when Greenspan first took the helm of the Fed, his goal was to ensure that the 1987 stock market crash did not appreciably increase unemployment (Delong
60). While there was a recession during the early 1990s, joblessness was not as wide spread as it had been anticipated -- thanks, in part, to Greenspans efforts to
keep interest rates low (thereby spurring capital development) (Delong 60). In addition, the Fed suppressed interest rates to make sure that the deficit reduction didnt lead to a depression in
consumer demand (Delong 60). Slowly, unemployment rates continued to sink until they hit an all-time low of 4 percent during the mid 1990s (Delong 60). As a result
of extraordinarily low interest rates and low unemployment -- not to mention a great deal of capital invested into various high-tech industries -- the economy began to heat up (Delong
61). The market began going up, prompting investors to place more money into these companies. The continual interest rates in the meantime, also fed a frenzy of development