George Selgin on Monetary Policy and the Great Recession

Did Ben Bernanke and the Fed save the US economy from disaster in 2008 or make things worse? Why did the Fed reward banks that kept reserves rather than releasing funds into the economy? George Selgin tries to answer these questions and more in this conversation with host Russ Roberts. Selgin argues that the Fed made critical mistakes both before and after the collapse of Lehman Brothers by lending to insolvent banks as well as by paying interest on reserves held at the Fed by member banks.