The #Global #Financial #Crisis of 2007/08 taught the policy making world that something special beyond #Conventional #MonetaryPolicy was necessary to lift economies out of the economic malaise...tinkering with the key rates was not enough anymore...
To this end, #centralbanks in the developed world (The US, UK, Japan, The EuroArea) adopted what they termed #UnconventionalMonetaryPolicy #UMP which is characterised by #ForwardGuidance #NegativeInterestRatePolicy & #QuantitativeEasing...but, have they helped?
Be that as it may, #Inflation is low, #Employment appears to be ticking up...hmm!! a bit puzzling if you consider the #PhillipsCurve argument...sooo...what are we seeing in these numbers? Is conventional theory still viable in today's "modern economy"?
What is clear is, our understanding of the connection between theory and on the ground developments needs to be strengthened. The question then becomes, what will #centralbanks do when economies find themselves in another #recession? Do they have any tools to lift us out?
Can counter cyclical central bank policy (say, loose policy, in the case of a downturn) help charge up the economy with rates near to or at the zero lower bound? #RayDalio advocates for #MP3 while #BenBernanke contests that #CentralBanks, through #UMP have the firepower...
#BenBernanke's speech at the 2020 #AEA #ASSA conference was a clear defence of #UMP. In general, he posits that #UMP should occupy space in the #MonetaryPolicy #toolbox. He goes on to say #UMP can give central banks the equivalent of 300 basis points of #Easing (accommodation) 
In closing....the #globaleconomy has had roughly a decade of unabated growth as evidenced by record highs in global stock markets (for e.g). If you are a student of business cycles, you will note that we can not grow in perpetuity, a #downturn is coming...what will we do?
@threadreaderapp kindly unroll...
