Negative Interest Rate Policy and the Zero Lower Bound

Neoclassical Story of the Monetary Policy Transmission Mechanism The traditional orthodox story tells us that interest rates affect the economy through a number of channels including (i) the investment channel whereby higher interest rates reduce investment, as it becomes more costly to invest thereby inducing firms to either invest with retained earnings or forego investment Read more about Negative Interest Rate Policy and the Zero Lower Bound[…]

Post-Keynesianism Part II

Day 1 – Talk 2 After our Introduction to Post-Keynesianism from Engelbert Stockhammer we were given a talk by Ozlem Onaran, from Greenwich University, on “Aggregate demand, income distribution and unemployment”. She begins by adding to Engelbert’s introduction, highlighting that fundamental uncertainty can lead to path dependency – that is decisions made today (as a Read more about Post-Keynesianism Part II[…]

What is hysteresis?

I recently wrote an article on the situation in Greece, and mentioned the effects of hysteresis which I will expand upon in this blog article. Hysteresis is a theory developed by the Keynesians to explain why laissez-faire economic policy may be damaging in the long run. Neoclassicalists would argue that during an economic downturn, when Read more about What is hysteresis?[…]