Early monetary exit risks return to recession: KC fed paper
Central banks that exit from their unconventional monetary policy stance early risk experiencing a double-dip recession, according to a Kansas City Federal Reserve paper published on Friday.
Andrew Foerster, the paper's author, builds a dynamic stochastic general equilibrium model with Markov regime switching to study the role of expectations and the unconventional monetary policy response to financial crises. The model considers the effects of different exit strategies, and whether expectations
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