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The Business Cycle Is Dying (Econ Lib, 4 mins) The frequency of recessions has reduced. This could be attributed to monetary policy becoming more effective. It is further argued that if the US avoids recession in few next years, the term ‘cycle’ will no longer be appropriate to explain the dynamics of the economy. [Bullish US]
Negative Nominal Interest Rates Can Worsen Liquidity Traps (Kansas City Fed, 22 mins) Andrew Glover, a senior economist at the Federal Reserve Bank of Kansas City, finds that negative interest rates (NIRP) would likely deepen a recession in a liquidity trap (self-fulfilling pessimism about aggregate demand). Regardless of whether NIRP cuts are large or small, it is always contractionary for the economy.