I want to figure out how much a standard Keynesian thinks that holding interest rates 0.5 percentage points too high, will increase unemployment (in percentage terms).
For example, suppose a recession hits and that a Keynesian thinks full employment requires the Fed to set interest rates at 2 percent, but instead the Fed for some reason only cuts rates down to 2.5 percent. Instead of unemployment falling to the natural rate, it will be higher. But how much higher?
As always, if you actually know what you’re talking about when you give me your answer, that would be swell.