Chairman Greenspan's Legacy

By Benjamin M. Friedman

The Age of Turbulence: Adventures in a New World

by Alan Greenspan

Penguin, 531 pp., $35.00

The US financial markets are suffering their rockiest period since the nation's savings and loan industry collapsed at the end of the 1980s. The economy either is on the verge of the first business recession since 2001 or is already in it. The Federal Reserve System is taking dramatic actions that reflect urgency at best and perhaps even a whiff of panic. In these circumstances, it is worth recalling that US monetary policy—broadly defined as the management of interest rates in order to control inflation and to maintain stable growth—has had a strikingly good run during the last two decades.