Fed officials debate risks of a ‘hot economy’
Academics and policy-makers weigh up whether economy is now overheating
Senior Federal Reserve officials past and present debated the benefits and potential costs of running the US economy hot during an event on February 18.
Anil Kashyap, an economics professor at the University of Chicago, told the US Monetary Policy Forum that the chance of a reversal in credit conditions is high right now. He said that because of ample funding, if conditions reversed the chances of the economy spiralling into a deep recession are much higher.
Kashyap, a former Fed economist, is
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