Use the IS-TR model (or a similar short-run model) to investigate the predictions for fiscal and monetary policy when policy interest rates get close to zero. Part 2: What policies would you suggest for economies close to the ‘zero lower bound’, if and when the next recession arrives? (Hint: When answering Part 2 it could be useful to consider the various fiscal and monetary policies that have been used (and suggested) since the Global Financial Crisis. Particularly with regard to monetary policy, don’t forget that the central banks (including the Bank of England, ECB, Bank of Japan, US Fed, etc.), who have conducted ‘unconventional’ monetary policy in recent years, all have webpages, which could provide useful information and resources to support your discussion.)
