Long & Variable Lags?

Check out the accompanying pdf and chart collection. Executive Summary: The economy has responded to monetary tightening quickly, our research finds, not with “long and variable lags” as monetarism theorizes. Today’s economy and financial systems are exceptionally resilient. … Among some of the reasons: A deluge of post-pandemic fiscal spending has dulled the impacts of tightening. Certain typically interest-rate sensitive industries have been atypically resistant to tightening because of pandemic effects specific to them. Tighter credit conditions after the banking crisis have not triggered a widespread credit crunch. Consumers’ excess savings are dropping fast, but the economic effects are offset by retiring Baby Boomers’ massive net worth. AI and other tech advances have kindled the animal spirits of economic actors.