Tag: monetary policy
Low fertility and increasing life expectancy in most of the world's economies are causing a decline in the natural interest rate. Too restrictive monetary policy may increase the risk of the economy falling into a deflationary trap.
Most countries of Western Europe used various types of austerity programs aimed at reducing the budget deficit in order to get out of economic trouble. Professor Alberto Alesina, an economist from Harvard University, examined which of these measures worked best.