The initial negative impact of the pandemic shock – in the absence of additional monetary policy accommodation – is captured by the downward shift in the expected path (the drop from “A” to “B”).
But all too often, political dreams are built on a limited understanding of reality. That’s why they are bound to crumble. That’s why swayed voters wake up to a nightmare version of reality. Such a dream world is the political strategy of finance-led growth, a dominant political ideology since the 1980s.