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.

  1. Monetary Policy

    Monetary policy is the actions of a central bank, currency board ...
  2. Federal Reserve Bank

    The central bank of the United States and the most powerful financial ...
  3. Industrialization

    The process in which a society or country (or world) transforms ...
  4. Ben Bernanke

    The chairman of the board of governors of the U.S. Federal Reserve. ...
  5. Money Market

    A segment of the financial market in which financial instruments ...
  6. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, ...
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