Zero Interest Rates Deepened Great Recession, Slowed Recovery: Study
The article compares the recessions of 2007-09, 1990-91, and 2001 using a New Keynesian model. It finds that all three downturns were caused by a mix of demand and supply issues. The most recent recession lasted longer and was more severe, deepening the great recession. The zero lower bound on interest rates made it harder for monetary policy to help the economy recover in 2009.