BIS paper finds stabilisation policy can impact long-run growth
Financially constrained businesses benefit most from counter-cyclical policy
The short-run interest rate has a "positive, significant and robust" impact on productivity growth via its effect on credit- and liquidity-constrained businesses, according to a working paper published by the Bank for International Settlements (BIS).
Liquidity and growth: the role of countercyclical interest rates by Philippe Aghion, Emmanuel Farhi and Enisse Kharroubi, takes both modelled and empirical approaches to assessing the long-run impact of short-run rates. They find that the more a
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