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Expansionary monetary policy may prevent deep recessions with uncertain long-term consequences. However, as a result, firms, households, and the government accumulate significant amounts of additional
Expansionary monetary policy may prevent deep recessions with uncertain long-term consequences. However, as a result, firms, households, and the government accumulate significant amounts of additional debt, the payments for which may result in lower spending and investment and likely slower recovery. With that in mind, should central banks implement expansionary monetary policy or not?
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