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commiting to keep interest rates low at the exit of the liquidity trap, to stabilize inflation today. 2. From debt … interest rates. Liquidity trap (LT) episodes are longer, however, the impact of interest rate policy commitments on inflation …
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We revisit the question whether U.S. fiscal policy in the pre-Volcker period was active or passive. To determine the policy stance, we estimate a DSGE model with monetary and fiscal policy interactions employing a sequential Monte Carlo algorithm (SMC) for posterior evaluation. In contrast to...
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