00:01
Which do you believe is a better macroeconomic policy to use for stabilizing, achieving potential gdp and controlling inflation, the economy? monetary friscal.
00:12
In a recession to try to encourage consumption and investment, monetary policy would entail lowering interest rates.
00:18
The exchange rate will support exports, which should also be weakened.
00:23
In the aftermath of the recession of the united kingdom in 1992, the reduction in interest rates, which facilitated the devaluation of the overvalued pound, was very successful in, driving economic growth.
00:35
High interest rates were largely responsible for the 1992 recession.
00:39
Therefore, lowering those interest rates lowered the burden on homeowners and businesses and allowed the economy to recover.
00:46
In 2009, interest rates in the uk, as well as across the globe, were cut from 5 % to 0 .5%.
00:52
But in restoring normal growth, interest rate cuts were unsuccessful.
00:57
There was a liquidity trap in the 2008 to 2009 recession.
01:01
Interest rate cuts were inadequate to stimulate expenditure and investment...