Mondustrial Policy

DEFINITION of 'Mondustrial Policy'

A fusion of "monetary policy" and "industrial policy," mondustrial policy describes the Fed's creation of new money during the 2008-2009 financial crisis in order to rescue certain firms, such as Bear Stearns and AIG, and certain markets, such as commercial paper and money-market mutual funds, at the expense of others, by purchasing securities and making loans.

BREAKING DOWN 'Mondustrial Policy'

A term coined by John Taylor, a Stanford economics professor, former Bush administration treasury undersecretary and developer of the Taylor Rule to guide interest-rate policy. The term describes the Fed's management under Ben Bernanke's leadership of the 2008-2009 financial crisis, which Taylor views as excessively interventionist. Taylor was also concerned about the future effects of this policy.

RELATED TERMS
  1. John B. Taylor

    An economics professor and expert on monetary policy. John B. ...
  2. Taylor's Rule

    A guideline for interest rate manipulation. It was introduced ...
  3. Policy Mix

    A government's combined use of fiscal policy and monetary policy ...
  4. Monetary Policy

    Monetary policy is the actions of a central bank, currency board ...
  5. Expense Constant

    A fixed amount added to a policy to cover the cost of administering ...
  6. Announcement Effect

    The impact on markets from the news that a change will occur ...
Related Articles
  1. Economics

    The Taylor Rule: Calculating Monetary Policy

    The Taylor Rule suggests how the central bank should change interest rates to account for inflation and other economic conditions.
  2. Economics

    The Taylor Rule: An Economic Model For Monetary Policy

    This interest rate forecasting model has helped central banks around the world adjust their rates to balance out inflation.
  3. Forex Education

    Lessons Learned

    In light of speculation that the euro is in trouble, we look at currencies that were once widely used but are now defunct.
  4. Credit & Loans

    Credit Crisis: Government Response

    By Brian PerryThe credit crisis has represented the gravest threat to the global financial system since the 1930s. Fortunately, policymakers have been proactive in their efforts to mitigate the ...
  5. Stock Analysis

    What AIG Looks Like Now (and How it Got that Way)

    Despite some mammoth mistakes and a gargantuan government bailout, AIG remains a global insurance powerhouse. Here's how it maintains its position.
  6. Economics

    Fiscal Vs. Monetary Policy Pros & Cons

    When it comes to influencing macroeconomic outcomes, governments have typically relied on one of two primary courses of action: monetary policy and fiscal policy.
  7. Term

    What's Tight Monetary Policy?

    A tight monetary policy constricts spending and curbs inflation.
  8. Investing

    Tech Startups Invest in Fusion Technology

    Significant strides have recently been made in fusion power. The end goal remains net energy production and useful ignition. While no single approach has succeeded, new innovative strategies ...
  9. Professionals

    Monetary Policy

    FINRA Series 6 Exam Study Guide - Monetary Policy. In this section, Monetary policy tools, money supply and interest rates. The role of the federal reserve board in monetary policy.
  10. Economics

    How Unconventional Monetary Policy Works

    Unconventional monetary policy, such as quantitative easing, can be used to jump-start economic growth and spur demand.
RELATED FAQS
  1. What's the difference between monetary policy and fiscal policy?

    Learn how monetary policy refers to bank actions to control interest rates and money supply, while fiscal policy refers to ... Read Answer >>
  2. Under what circumstances will a government change its monetary policy?

    Learn about the kind of variables, including political and theoretical factors, that can bring about change in a government's ... Read Answer >>
  3. What precise measures are implemented in most monetary policies?

    Read about some of the precise measures implemented in most monetary policies, and learn why monetary policy is considered ... Read Answer >>
  4. How can retail investors invest in commercial paper?

    Find out how individual retail investors can purchase short-term commercial paper, but why it rarely makes good investment ... Read Answer >>
  5. How is free enterprise affected by monetary policy?

    Find out how state-run monetary policy changes a free enterprise system by adjusting market rates of interest and manipulating ... Read Answer >>
  6. Can retail investors buy commercial paper?

    Find out whether retail investors buy commercial paper, and learn about the restrictions that often prevent individual investors ... Read Answer >>
Hot Definitions
  1. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  2. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  3. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
Trading Center