Verona, Fabio; Martins, Manuel M. F.; Drumond, Inês - Suomen Pankki - 2013
Motivated by the U.S. events of the 2000s, we address whether a too low for too long interest rate policy may generate … times. Our results suggest that the U.S. boom-bust was caused by the combination of (i) interest rates that were too low for … too long, (ii) excessive optimism and (iii) a failure of agents to anticipate the extent of the abnormally favourable …