Crunch Time: Fiscal Crises and the Role of Monetary Policy

A nice chart from a new speech from Jerome Powell.

What doesn’t follow is that we need to get the red line up by cutting spending to get the blue line down (based on the logic of Delong Summers and the realization that economic growth is the single best way to get the blue line down). Premature and untargeted fiscal contraction simply won’t.

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About ozidar

Graduate student at UC Berkeley, studying public finance & labor economics. https://sites.google.com/site/omzidar/
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