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- Title
BEHAVIOURAL MACROECONOMICS: THEORY AND POLICY.
- Authors
Wood, Geoffrey
- Abstract
De Grauwe and Ji do something about it, and develop models based not on omniscience but on a "willingness to learn from past mistakes". The zero lower bound problem arises because if an inflation target is low enough, then in some circumstances the central bank's policy rate would need to go below zero, which although more possible than would have been thought, say, 20 years ago, is not easy and has substantial negative effects in the longer term. De Grauwe and Ji construct a case why central bank inflation targets should be higher than they currently are, and at the same time why they should not be I much i higher than they currently are.
- Subjects
MACROECONOMICS; MACROECONOMIC models; CENTRAL banking industry; PRICE increases; INFLATION targeting
- Publication
Economic Affairs, 2020, Vol 40, Issue 2, p308
- ISSN
0265-0665
- Publication type
Book Review
- DOI
10.1111/ecaf.12396