Because of real factors, in a nutshell:
That is a new NBER working paper by Ed Leamer. This of course bears on current monetary policy debates. A very firmly held view on Twitter is that our post-2012 (or so) recovery could have been quicker, had the Fed been more aggressive, and thus we cannot afford to make the same mistake again. Yet after a certain point it was real factors responsible for the recovery problems, and this new Leamer paper shows that (money still should be have been looser earlier on, in my view). See also my previous coverage of papers by Marianna Kudylak (and co-authors), and Bob Hall directs my attention to this recent paper on why employment right now is recovering as fast as it is. The evidence really is piling up very rapidly and decisively that mainly real factors are/were the problem after a certain point.
