Monetary policy shifts lead to significant rise in unemployment rates
The article examines how changes in monetary policy impact the economy by studying historical data. It focuses on six instances after World War II when the Federal Reserve tried to reduce inflation by causing a recession. The study shows that shifting to anti-inflationary policies led to a significant increase in unemployment. These effects were long-lasting and played a major role in economic fluctuations. The findings suggest that monetary disturbances have a substantial impact on the real economy.