Negative rates could have sped up US recovery – San Fran Fed paper


Negative interest rates from the Federal Reserve could have lessened the severity of the recession and sped up the recovery, a paper published by the San Francisco Fed finds.

In the paper, Vasco Cúrdia uses a model to estimate the underlying conditions in the economy since the crisis and then simulates a scenario where the Federal funds rate was set below zero. He then looks at how the output gap and inflation rate path developed in the scenario and in the actual data.  

He finds that reducing

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