We Actually Do Know What Works

  • There is much frettening about what are often called unprecedented expansionary policies.
  • While these policies do have risks and drawbacks, historical evidence strongly suggests that they work under conditions similar to what many economies experienced in the aftermath of the 2008 financial crisis.
  • Conceptually, it’s also not terribly difficult to explain why these policies work, large private sector deleveraging creates a large shortfall in demand which has a tendency to feed on itself.

We Actually Do Know What Works | Seeking Alpha