Recessions are always and everywhere caused by monetary policy

https://www.basilhalperin.com/essays/recessions-are-always-everywhere-caused-by-monetary-policy.html

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Basil Halperin @BasilHalperin

New post: Recessions are always and everywhere caused by monetary policy basilhalperin.com/essays/recessi… Some macroeconomics, but really some philosophy on *what is causality* and what do we mean by ‘cause’

basilhalperin.comRecessions are always and everywhere caused by monetary policyCentral banks should, by default, keep an economy out of recession. Therefore, describing central banks as ‘the’ cause of recessions is the most useful way of talking about the world.

Basil Halperin @BasilHalperin

TLDR: Causality is a property of the map, not of the territory; but some maps are more useful than other ones The Fed should, by default, keep the economy out of recession. Therefore, describing it as ‘the’ cause of recessions is *the most useful way of talking about the world*

Basil Halperin @BasilHalperin

Any time output is below potential, we should think of it as the central bank’s fault If not, pick your poison: do you disagree with #1, #2, or #3?