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“Leaning against the Wind” 107 Figure 1. Actual and Counterfactual Outcome for the Policy Rate, Inflation, Unemployment, and the Household DTI Ratio Source: Svensson (2014a).
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art of basketball “Leaning against the wind” (LAW), that is, tighter monetary policy for financial-stability purposes, has costs in terms of a weaker economy with higher unemployment and lower inflation and possible benefits from a lower probability or magnitude of a (financial) crisis. A …
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