Autonomous consumption declines

IS/LM

Monetary targeting: selling government bonds

Interest rate targeting: increasing r

Investment trap

Interest rate targeting: raising interest rate: maintain previous equilibr.

Interest rate targeting- increased default risk(x)

Stabilize output: low interest rate begin

Declining price expectations

Risk premium increases

Labor market

Lower unemployment benefits

Increase age of retirement

Introduction of antitrust regulations

Technical progress industry 4.0

Phillips Curve

Higher markup

Adaptive expectations: interest rate targeting, low risk premium, central bank wants to bring back
inflation rate to initial level

inflation rate and unemployment over

time
Interest rate targeting, new technology

Interest rate targeting: less oil

High output forever: monetary, fiscal policy