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Real business cycles: a legacy of countercyclical policies?

  • Economics


If business cycles are caused mostly by changes in productivity, rather than by monetary and financial disturbances, what role do monetary and fiscal policies play? In this article, Satyajit Chatterjee discusses the possibility that countercyclical monetary and fiscal policies have played an important role in reducing the severity of business cycles since World War II but that additional countercyclical policies that try to offset movements in productivity aren't likely to be beneficial

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