U.S monetary policy is less powerful in recessions

With immense pressure on public finances during the Great Recession restricting the use of fiscal policies, many governments have turned to monetary policy instruments to aid economic recovery. But how effective are these policies in times of recession? Silvana Tenreyro and Gregory Thwaites find that changes in official interest rates have no discernible effect on the economy during recessions. In light of this, they argue that recent signs of economic recovery are there in spite of the current policy mix, not because of it.