I don't know about his country, but this is done also in my country, Switzerland. There isn't much growth, but unemployment is usually lower than 4% I think.
I think they don't try to shorten recessions, but they intervene in case of crashes and bursting bubbles in order to keep the financial markets functioning.
I'm not sure there is much evidence that lowering interest rates help the economy to come out of a recession. I studied economics almost 20 years ago and then the prevailing opinion of economists was that you can't know when a recession will end, so lowering interest rates to spur growth is likely to just cause inflation after the recession ends.
Anyway, if the central bank targets inflation, it also has lower interest rates in a slow economy that doesn't risk overheating.
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So in your country their could be a massive depression with everybody out of work and your FED won't lower interest rates?
I don't know about his country, but this is done also in my country, Switzerland. There isn't much growth, but unemployment is usually lower than 4% I think.
I think they don't try to shorten recessions, but they intervene in case of crashes and bursting bubbles in order to keep the financial markets functioning.
I'm not sure there is much evidence that lowering interest rates help the economy to come out of a recession. I studied economics almost 20 years ago and then the prevailing opinion of economists was that you can't know when a recession will end, so lowering interest rates to spur growth is likely to just cause inflation after the recession ends.
Anyway, if the central bank targets inflation, it also has lower interest rates in a slow economy that doesn't risk overheating.
If the inflation was kept under control (not too low, not too high) then they would not do anything other then usual.
They of course monitor unemployment but only because unemployment rate (which is currently 12.7%) can influence future behavior of inflation rate.