When a big recession hits, monetary policy often isn’t able to do the whole job of getting an economy back to full employment. Interest rate cuts eventually push rates to zero, which they can’t go much below. Alternative tools like central-bank forward guidance and quantitative easing can help, but even these are limited. At some point, the government needs to start spending money to give the economy a boost. Fortunately, economists generally agree that fiscal stimulus is important and effective at helping battle economic slowdowns. But fiscal stimulus is politically difficult. Unlike monet...
Read More
No comments:
Post a Comment