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Rewriting Textbook Economics

The Fed's decision to sustain quantitative easing for at least another month is the latest reflection of a fundamental shift in central banks' approach to monetary policy. What was once standard has become almost unthinkable, and the exceptional – near-zero interest rates and large-scale asset purchases – has become the norm.

TILBURG – Federal Reserve Chairman Ben Bernanke’s recent announcement that the Fed would maintain the current pace of monetary stimulus in the United States has cinched it: economics textbooks, at least the chapters on monetary policy, need to be rewritten.