Chapter Seventeen: Monetary policy after the subprime crisis
Abstract
This chapter aims to discuss the monetary policy put forth after the 2008 financial crisis from a Post-Keynesian perspective. Before the crisis, the so-called New Monetary Consensus argued that monetary policy should focus only on the short-term interest rate. After the crisis, some mainstream economists started to “rethink” macroeconomic theory and policy. However, this rethinking does not go deep in understanding the true nature of monetary economies. For Keynes and Minsky, monetary policy alone is never sufficient to deal with the intrinsic instability of capitalist ...
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