Experiments that depart from conventional economic policy can be costly. But this does not mean that there are universal rules in economics or that the prevailing view among mainstream economists should determine what policymakers do.
CAMBRIDGE – The specter of inflation is once again stalking the world, after a long period of dormancy during which policymakers were more likely to be preoccupied by price deflation. Now, old debates have resurfaced on how best to restore price stability. Should policymakers step on the monetary and fiscal brakes, by reducing spending and raising interest rates – the orthodox approach to fighting inflation? Should they instead move in the opposite direction by lowering interestRead More »