The rule that economists would sign to deal with financial crises are:
- offset policies that might create long-run problems.
- deal with moral hazards
- deal with the law of diminishing control.
What is a financial crises?
This refers to a disruption in financial markets by a sharp decline in asset prices and numerous failures of many financial and non financial firms.
Hence, the precepts on dealing with financial crises that majority of economists would sign onto includes recognizing and offseting policies that might create long-run problems, dealing with moral hazards and law of diminishing control etc.
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