Monetary Policy Impacts Long-Term Growth, Sparking Consumption Boom and Fiscal Shift
The article introduces a new economic model that combines short-term fluctuations with long-term growth trends. It shows how temporary shocks can have lasting effects on the economy, affecting both short and medium-term outcomes. The model explains how changes in monetary policy can impact long-term economic output and lead to a deflationary spiral. It also highlights the importance of fiscal policy in influencing economic conditions.