In-depth: have central banks worsened the secular slowdown?
IMF economist Bas Bakker shares his argument that central banks have misdiagnosed falling growth and long-run rates. He and several other economists are now calling for a rethink
The decline in neutral rates is “not directly affected” by Federal Reserve policy, chair Jerome Powell told lawmakers in November testimony. Powell’s statement reflects a broad consensus among central bankers. But not everyone agrees.
An economist from the International Monetary Fund, Bas Bakker, argues that instead, the decline in neutral rates (often known as r*) may very well be a direct result of central bank policy.
If correct, his orthodoxy-busting paper may provide novel answers to key
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