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forcefully to a recession caused not by short-term factors, but rather by an over-accumulation of debt by sovereigns, banks, and … households: a so-called "balance sheet recession." Though the nature of the crisis was understood relatively early on, policy …
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Lucas (1972) was a paper that permanently changed the course of macroeconomics, even though its "money supply surprise" model lost its central place in the area within a decade because of empirical difficulties. However, Lucas's novel methodology, based on clearing markets and rational...
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