Should monetary policy lean or clean: a reassessment

There has been considerable debate in recent years about whether monetary policy should "lean against the wind" during the expansion phase of the credit cycle or whether it should rather "clean up" after the credit cycle contracts. While nobody would question the desirability of leaning enough to reduce inflation pressures associated with credit growth, the real question that has emerged in recent years is: should monetary policy be tightened by more than what appears warranted by the near-term

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