So there was a "deep conceptual issue" involved in New Keynesian analysis: its failure to explain how banks might come to "underprice risk worldwide," as Alan Greenspan put
This perception of a Greenspan Put
aided the ensuing stock market recovery after Black Monday, which turned out to be the greatest bull market in American history.
Whatever the immediate motive, this late-cycle inflationary injection to sustain asset price inflation is the antecedent of what later became described as the Greenspan Put.
Even so, it cannot be precluded in principle that a Greenspan put could have some success, especially if a big new story emerges coincidentally.
The Greenspan Fed responded to the economic downturn of 1990-1992 (in the wake of the bust to the Volcker asset price inflation of boom-type as extended by the first Greenspan put of late 1987 and early 1988) by holding rates at abnormally low levels for an extended period (1992-1993).
This phenomenon became so entrenched in investors' minds, that it got a name of its own: the Greenspan Put
In doing so, it has replaced the Greenspan Put
with a Bernanke Put.
As Federal Reserve Chairman Alan Greenspan put
it in congressional testimony in early 2004, "The problem that exists is because they have a subsidy, granted not by the Congress but by the expectation that government will bail them out in the event of a crisis.
In a speech he gave in March 2002, Federal Reserve Board Chairman Alan Greenspan put
the issue in a nutshell.
David Greenspan puts
the play back in playwriting in this clever lark of a comedy about life in the theater, or life and the theater.