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Posted inCT Viewpoints

Negative interest rates: A cure for the coronavirus recession?

We are in the age of the coronavirus, the perfect storm that will reign terror on our fragile economy. Quarantines prevent people from going to work, disrupting supply chains and shocking productivity. Fear of catching the virus alongside the push for social distancing slashes aggregate demand as money circulated through restaurants, shopping centers, and the entire travel industry is curtailed. This comes alongside upward inflationary pressures from a limited supply of labor and production. A frightening word comes to mind: stagflation.