#IMF Working Paper 17/250 argues 4 a #NewParadigm of the '#BusinessCycle'- the #OutputGap can be 'ill-conceived, poorly-measured & inconsistent over time' - output losses can in fact be permanent, depressing both trend and level, w only partial recovery.....via @sdonnan pic.twitter.com/K516WSZQyq— Satyen Baindur (@Satyen_Baindur) March 21, 2018
The #ParadigmShift upsets #ConventionalWisdom: Since financial crises cause #GrowthRecessions, strong #FinancialRegulation can b pro-#Growth; & #Fiscal #conservatism b4, during & after crises (even if not #austerity) is advisable, 2 decrease chance of high future sovereign debt..— Satyen Baindur (@Satyen_Baindur) March 22, 2018
And 4 #Monetary policy, the new paradigm argues in favor of making #FinancialStability an explicit part of the mandate, to the extent of #LeaningAgainstTheWind, and even accepting higher inflation & output volatility as a means of decreasing the risk of future #FinancialCrisis...— Satyen Baindur (@Satyen_Baindur) March 22, 2018
Apropos #IMF Working Paper 17/250, which argues 4 a #NewParadigm for the #BusinessCycle, where crises can permanently reduce output (both level and growth rate), here's US #RGDP growth rates 4 each #NBER !#BusinessCycle since 1948 [from the 2018 Economic Report of the President] pic.twitter.com/CdGGQ7npv5— Satyen Baindur (@Satyen_Baindur) March 23, 2018
