The traditional mental model seems to see contractionary monetary policy as adding friction or letting up on the gas pedal in a car, for example, Noah Smith: "When the economy is doing well, raise interest rates to slow things down ..."
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Another analogy for monetary policy and…
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The traditional mental model seems to see contractionary monetary policy as adding friction or letting up on the gas pedal in a car, for example, Noah Smith: "When the economy is doing well, raise interest rates to slow things down ..."