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?
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
Therefore, what are three possible reasons why monetary policy was not able to restore expansionary growth during and after the Great recession?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
