Unconventional Monetary Policy on Stilts

Unconventional Monetary Policy on Stilts

1 April 2016, 15:25
Francis Dogbe
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With most advanced economies experiencing anemic recoveries from the 2008 financial crisis, their central banks have been forced to move from conventional monetary policy – reducing policy rates via open-market purchases of short-term government bonds – to a range of unconventional policies. Although the zero nominal bound on interest rates – previously only a theoretical possibility – had been reached and zero-interest-rate policy (ZIRP) had been implemented, growth remained anemic. So central banks embraced measures that didn’t even exist in their policy toolkit a decade ago. And now they are ... READ MORE
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