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Les Echos:
Deflation, saison 2

5 November 2013

Ensuite, meme s'ils pouvaient preter au tout-venant, il est loin d'etre sur que le tout-venant veuille emprunter. On ne fait pas boire un ane qui n'a pas soif. Deux economistes de la London School of Economics, qui ont publie recemment une etude (1) sur l'efficacite comparee de la politique monetaire en temps d'expansion et de recession aux Etats-Unis, le montrent clairement: si des taux d'interet en augmentation freinent l'activite, des taux diminues ne la relancent pas. Il faut alors agir par d'autres instruments que la politique monetaire classique.
Deflation, season 2 [Translation]
Then, even if they could lend to the run, it is far from sure that the ungraded wants to borrow. We do not drink a donkey who is not thirsty. Two economists at the London School of Economics, who published recently a study (1) on the effectiveness of monetary policy in times of expansion and recession in the United States, compared clearly demonstrate: If rising interest rates slow activity, reduced rates will not revive. We must then act by other instruments than policy monetary classic.

This article was published in Les Echos on November 5, 2013
Link to article here

Related publications
Pushing On a String: US Monetary Policy is Less Powerful in Recessions, Silvana Tenreyro and Gregory Thwaites, Centre for Economic Performance Discussion Paper No.1218, May 2013

Related links
Silvana Tenreyro webpage
Macro Programme webpage

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