Interest Rate Cuts

J. Bradford DeLong
delong@econ.berkeley.edu
http://www.j-bradford-delong.net/

November 2001


Source: Economist

  • The 4.5 percentage-point reduction in the target Federal Funds rate by the Federal Reserve over the past year is an astonishingly large shift in monetary policy.
  • Yet it is not clear it will be enough to avoid a deep recession.
  • And there is not that much more room left for further monetary expansion.
  • The Bank of England has cut interest rates by only half as much as the Federal Reserve.
  • The European Central Bank has cut interest rates by only one-third as much as the Federal Reserve.


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