[PEN-L] "Greenspan Put" Simplified

[Jayson Funke]

I have been trying to understand the “Greenspan put”, which is the phrase
often used to refer to the Fed’s willingness to backstop equity declines in
financial markets. Why would lower interest rates encourage money to flow
into financial markets? Who are the investors that borrow said money for
such purposes and from whom do they borrow?

Thanks

Jayson Funke

Graduate School of Geography
Clark University
950 Main Street
Worcester, MA 01610