Monetary policy isn't always effective: Why couldn't monetary policy pull us out of the Great recession? The Great Recession officially lasted from December 2007 to June 2009. But the effects lingered on for several years thereafter, with slow growth of real GDP and high unemployment rates. These effects all occurred despite several doses of expansionary monetary policy. Not only did the Fed push short- term interest rates to nearly 0%, but it also engaged in several rounds of quantitative easing, purchasing hundreds of billions of dollars' worth of long-term bonds. Therefore, what are three possible reasons why monetary policy was not able to restore expansionary growth during and after the Great recession?

Monetary policy isn't always effective: Why couldn't monetary policy pull us out of the Great recession? The Great Recession officially lasted from December 2007 to June 2009. But the effects lingered on for several years thereafter, with slow growth of real GDP and high unemployment rates. These effects all occurred despite several doses of expansionary monetary policy. Not only did the Fed push short- term interest rates to nearly 0%, but it also engaged in several rounds of quantitative easing, purchasing hundreds of billions of dollars' worth of long-term bonds. Therefore, what are three possible reasons why monetary policy was not able to restore expansionary growth during and after the Great recession?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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