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..."The key reason jobs will almost certainly grow at at least a tepid rate is monetary policy. Ellis Tallman and Saeed Zaman have shown in research for the Cleveland Federal Reserve bank that the kind of objective economic conditions that existed in 2009 would have justified a federal funds rate of minus 5 percent—if such a thing were possible. But it’s not possible for the Fed to set nominal interest rates below zero, and the Fed hasn’t been willing to try to raise its inflation target to reduce real interest rates. Consequently, with interest rates stuck at zero, we got exactly what you would expect in a country where the central bank sets rates five percentage points too high—soaring unemployment and a sluggish recovery."
Kewords: US Economy, Economic Growth, Monetary Policy
Countercyclical monetary policy.. proof of concept has to follow.
Philippe Aghion CERGE-EI Lecture "Monetary Policy, Liquidity and Growth" 11 June 2012
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