We are now entering phase 2 of the New Keynesian policy folly.
Phase 1 – was the rising interest rates to fight an inflation that was not interest-rate sensitive.
Phase 2 – run policy so tight that recession is inevitable.
We are now entering phase 2 of the New Keynesian policy folly.
Phase 1 – was the rising interest rates to fight an inflation that was not interest-rate sensitive.
Phase 2 – run policy so tight that recession is inevitable.
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