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The Case for Repairing Broken Channels without the Use of Unconventional Monetary Policy

The Case for Repairing Broken Channels without the Use of Unconventional Monetary Policy Abstract The paper shows that the literature on broken channels (1) fails to provide an explanation of the root causes of the crisis, (2) mistakes a subjective human behavior for a mechanical failure and (3) confuses market adjustment mechanisms. From this perspective, the policy aiming to deploy unconventional monetary policies to overcome the broken channels is misguided. The paper fits broken channels into the framework of a more comprehensive theory of the business cycle and suggests a different policy recommendation. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal des Économistes et des Études Humaines de Gruyter

The Case for Repairing Broken Channels without the Use of Unconventional Monetary Policy

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Publisher
de Gruyter
Copyright
Copyright © 2016 by the
ISSN
2194-5799
eISSN
2153-1552
DOI
10.1515/jeeh-2016-0006
Publisher site
See Article on Publisher Site

Abstract

Abstract The paper shows that the literature on broken channels (1) fails to provide an explanation of the root causes of the crisis, (2) mistakes a subjective human behavior for a mechanical failure and (3) confuses market adjustment mechanisms. From this perspective, the policy aiming to deploy unconventional monetary policies to overcome the broken channels is misguided. The paper fits broken channels into the framework of a more comprehensive theory of the business cycle and suggests a different policy recommendation.

Journal

Journal des Économistes et des Études Humainesde Gruyter

Published: Jul 1, 2016

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