Virginie Boinet, Christopher Martin
Abstract
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The optimal monetary policy response to an increase in aggregate demand may be to reduce the interest rate. This apparently perverse response of interest rates can occur when the Phillips curve is non-linear.
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The optimal monetary policy response to an increase in aggregate demand may be to reduce the interest rate. This apparently perverse response of interest rates can occur when the Phillips curve is non-linear.
Key concepts: Interest rate, Economics, Inflation (cosmology), Fisher hypothesis, Monetary policy, Monetary economics, Nominal interest rate, Aggregate demand