In the period of low interest rates and low inflation after the 2008 financial crisis, fiscal and monetary policies underwent a radical reassessment. But now that macroeconomic and financial conditions may be changing once again, the reassessment will have to be reconsidered.
CAMBRIDGE – The long era of ultra-low interest rates that began after the 2008 financial crisis has led to a significant reassessment of monetary and fiscal policy. Should the sharp, global increase in inflation call into question policy recommendations that were shaped largely by events of the past 15 years, rather than by longer experience? One might think so, even if neither mainstream economic forecasters like the International Monetary Fund nor financial markets seem to be anticipating much of a shakeup to the status quo. I am not so sure.
CAMBRIDGE – The long era of ultra-low interest rates that began after the 2008 financial crisis has led to a significant reassessment of monetary and fiscal policy. Should the sharp, global increase in inflation call into question policy recommendations that were shaped largely by events of the past 15 years, rather than by longer experience? One might think so, even if neither mainstream economic forecasters like the International Monetary Fund nor financial markets seem to be anticipating much of a shakeup to the status quo. I am not so sure.