{"id":1820,"date":"2019-12-19T06:33:14","date_gmt":"2019-12-19T13:33:14","guid":{"rendered":"http:\/\/thomaspalley.com\/?p=1820"},"modified":"2019-12-19T06:33:15","modified_gmt":"2019-12-19T13:33:15","slug":"the-economics-of-negative-interest-rates-editors-introduction","status":"publish","type":"post","link":"https:\/\/thomaspalley.com\/?p=1820","title":{"rendered":"The economics of negative interest rates: editors&#8217; introduction"},"content":{"rendered":"\n<p>Thomas Palley,  Louis-Philippe Rochon, Guillaume Vallet ,<em> Review of Keynesian Economics<\/em>, April 2019.<\/p>\n\n\n\n<p>The Great Recession (2008\/9) triggered\nby the financial crisis of 2008 has had considerable impact on the conduct of\nmonetary policy. Before the recession, monetary policy was largely based on a New\nConsensus-type macroeconomic model and it targeted inflation via a Taylor interest\nrate rule. The belief was that policy engineered changes in real interest rates\nhad strong and predictable effects on output and inflation. <\/p>\n\n\n\n<p>Based on that understanding, in the immediate wake of the financial crisis, central banks were quick to lower their policy interest rate to zero or near-zero. The expectation was for a speedy and robust V-shaped recovery, an expectation which was reflected in Federal Reserve Chairman Ben Bernanke\u2019s comments in March 2009 about seeing \u201cgreen shoots\u201d of economic recovery. <\/p>\n\n\n\n<p>When that V-shaped recovery failed to materialize, expectations shifted to a U-shaped recovery, and then in turn morphed into L-shaped recovery and talk of secular stagnation. <a href=\"https:\/\/www.elgaronline.com\/view\/journals\/roke\/7-2\/roke.2019.02.01.xml\">READ MORE<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Thomas Palley, Louis-Philippe Rochon, Guillaume Vallet , Review of Keynesian Economics, April 2019. The Great Recession (2008\/9) triggered by the financial crisis of 2008 has had considerable impact on the conduct of monetary policy. Before the recession, monetary policy was largely based on a New Consensus-type macroeconomic model and it targeted inflation via a Taylor [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,7,3,1],"tags":[],"class_list":["post-1820","post","type-post","status-publish","format-standard","hentry","category-economics","category-political-economy","category-us-policy","category-1"],"_links":{"self":[{"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/posts\/1820","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1820"}],"version-history":[{"count":2,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/posts\/1820\/revisions"}],"predecessor-version":[{"id":1822,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/posts\/1820\/revisions\/1822"}],"wp:attachment":[{"href":"https:\/\/thomaspalley.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1820"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1820"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1820"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}