This was Miles Kimball' contention, questioned by David Andolfatto recently. An anecdote from the sticky price DSGE literature. Suppose we take the view that the Great Recession was primarily a credit crunch. As such, looser policy would have been a very weak instrument to offset it.
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Would negative nominal interest rates have…
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This was Miles Kimball' contention, questioned by David Andolfatto recently. An anecdote from the sticky price DSGE literature. Suppose we take the view that the Great Recession was primarily a credit crunch. As such, looser policy would have been a very weak instrument to offset it.