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Lessons from Past US Monetary Easing Cycles
Many central banks are at a critical juncture in their current monetary policy cycles as they assess whether it would be appropriate to embark on an easing phase following one of the most aggressive episodes of monetary tightening in recent history. In this note, we highlight key aspects of past monetary policy easing episodes in selected advanced economies and what lessons we may learn from these past experiences. Reviewing the historical record, we identify instances where monetary policy was tightened in response to increased inflation, and subsequently dialed back when inflationary pressures abated. From these ... (full story)