unconventional_monetary_policy.edited.docx

Practical assessment economists argue for and against

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Practical assessment Economists argue for and against the use of signaling as a policy. Those against insist that the commitment to keep interests low, for instance, may send the message that the economy is depressed and have a negative impact. For example, the Bank of England in 2015 had pledged to keep interest rates at zero but would change them if the circumstances in the market changed. A sure way to apply this policy has been through linking it to the state of the economy. For instance, the central bank can pledge to keep interest rates at percent until unemployment fall below 5 percent or growth of over 3 percent is realized. This application sends a strong positive
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Surname3 message concerning the economy and is likely to achieve the desired goal. Forward signaling has also been successfully used to prevent deflation by giving a signal of future inflation. Works Cited Bernanke, Ben S. "Monetary Policy in a new era." Prepared for the Rethinking Macroeconomic Policy conference, Washington, DC: Peterson Institute. . com/system/files/documents/bernanke20171012paper. Pdf (Accessed November 3, 2017) . 2017. Rogoff, Kenneth. "Dealing with Monetary Paralysis at the Zero Bound." Journal of Economic Perspectives 31.3 (2017): 47-66.
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