{"id":50517,"date":"2020-01-11T20:36:50","date_gmt":"2020-01-12T01:36:50","guid":{"rendered":"https:\/\/olduvai.ca\/?p=50517"},"modified":"2020-01-11T20:36:54","modified_gmt":"2020-01-12T01:36:54","slug":"central-bankers-are-quietly-freaking-out-about-how-to-fight-the-next-recession","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=50517","title":{"rendered":"Central Bankers Are Quietly Freaking Out About How To Fight The Next Recession"},"content":{"rendered":"\n

Central Bankers Are Quietly Freaking Out About How To Fight The Next Recession\u00a0<\/a><\/h3>\n\n\n\n
\"Mark
Mark Carney, governor of the Bank of England (BOE), listens at the annual Mansion House dinner in … [+]2018 BLOOMBERG FINANCE LP<\/figcaption><\/figure>\n\n\n\n

The world’s top central bank officials are rightly concerned that politicians in rich economies missed one key lesson of the last recession: Interest rate cuts can help to moderate a downturn, but aggressive fiscal policy is key to a healthy recovery. <\/p>\n\n\n\n

It was a pro-austerity stance both in the United States, and even more saliently in the euro zone, that arguably prolonged the period of high unemployment and low wage growth that plagued most of the decade-long recovery from the 2007-2009 U.S. Great Recession. <\/p>\n\n\n\n

Outgoing Bank of England Governor Mark Carney told the Financial Times<\/a> this week that central banks are running low on fuel. “If there were to be a deeper downturn, [that requires] more stimulus than a conventional recession, then it\u2019s not clear that monetary policy would have sufficient space,” he said.Today In: Money<\/a><\/p>\n\n\n\n

\u201cIt\u2019s generally true that there\u2019s much less ammunition for all the major central banks than they previously had and I\u2019m of the opinion that this situation will persist for some time.\u201d  <\/p>\n\n\n\n

That echoed the sentiment of Christine Lagarde<\/a>, who recently took over the European Central Bank. She\u2019s telling budget-shy European politicians (especially in Germany) to get to work<\/a>. <\/p>\n\n\n\n

Now, a new paper from Fed board<\/a> economist Michael Kiley points to similar alarm among U.S. central bankers about their ability to fight future slumps. <\/p>\n\n\n\n

Drawing up two basic assumptions of what a downturn might look like, Kiley finds that “a recession may result in near-zero interest rates at long maturities, bringing U.S. experience closer to that seen in Europe and Japan.\u201d<\/p>\n\n\n\n

This, says Kiley, \u201ccould imply limits on the ability of monetary policy to support a recovery.\u201d<\/p>\n\n\n\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

Central Bankers Are Quietly Freaking Out About How To Fight The Next Recession\u00a0 The world’s top central bank officials are rightly concerned that politicians in rich economies missed one key lesson of the last recession: Interest rate cuts can help to moderate a downturn, but aggressive fiscal policy is key to a healthy recovery.  It […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[56,28802,233,282,303,7921,995,13349,3650],"class_list":["post-50517","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-england","tag-christine-legarde","tag-ecb","tag-european-central-bank","tag-fed","tag-forbes","tag-mark-carney","tag-pedro-nicolaci-da-costa","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50517","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=50517"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50517\/revisions"}],"predecessor-version":[{"id":50518,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50517\/revisions\/50518"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=50517"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=50517"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=50517"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}