korrents

A korrentour reading

A fiscal expansion when the economy is already at potential output prompts monetary tightening that dampens or eliminates its effect on output.

Drawn from what Olivier Blanchard said

In the currentinterest rates
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What Olivier Blanchard actually said

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  1. OB

    Olivier Blanchard 1 Jun 2022

    If a fiscal expansion takes place when output is already at potential, monetary policy is likely to tighten, leading to higher interest rates and thus a smaller effect or even no effect of the fiscal expansion on output.

    ↗Fiscal Policy under Low Interest Ratesdirect.mit.edu

First recorded here 1 Jun 2022 · How quotes work

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