Thoughts that occurred to me while reading Bernanke's recent speech.
Two thing. One: if interest rates at the zero bound are a bad thing, because for instance central banks in that position have to resort to unconventional monetary policy (see Japan and the U.S.) what can countries do to prevent the need to lower interest rates to the zero bound? Lower interest rates are designed to stimulate the economy. Are there other means of stimulating economy. See Michael Grunwald's the New New Deal.
Two, if Rogoff and Reinhart are right and historically financial crises take a long time to recover from, should there be an emphasis on preventing them. What caused the recent financial crisis? Isn't it the case that it takes a long time to recover from a financial crises because of policy errors and Zombie Ideas like expansionary austerity?
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