Liquidity Traps, Learning and Stagnation

Please use this identifier to cite or link to this item: http://dspace.mediu.edu.my:8181/xmlui/handle/10419/17857

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DC Field	Value	Language
dc.creator	Evans, George W.	-
dc.creator	Guse, Eran	-
dc.creator	Honkapohja, Seppo	-
dc.date	2007	-
dc.date.accessioned	2013-10-16T06:57:06Z	-
dc.date.available	2013-10-16T06:57:06Z	-
dc.date.issued	2013-10-16	-
dc.identifier	http://hdl.handle.net/10419/17857	-
dc.identifier	ppn:53487648X	-
dc.identifier.uri	http://koha.mediu.edu.my:8181/xmlui/handle/10419/17857	-
dc.description	We examine global economic dynamics under learning in a New Keynesian model in which the interest-rate rule is subject to the zero lower bound. Under normal monetary and fiscal policy, the intended steady state is locally but not globally stable. Large pessimistic shocks to expectations can lead to deflationary spirals with falling prices and falling output. To avoid this outcome we recommend augmenting normal policies with aggressive monetary and fiscal policy that guarantee a lower bound on inflation. In contrast, policies geared toward ensuring an output lower bound are insufficient for avoiding deflationary spirals.	-
dc.language	eng	-
dc.publisher	Kiel Institute for the World Economy (IfW) Kiel	-
dc.relation	Kieler Arbeitspapiere 1341	-
dc.rights	http://www.econstor.eu/dspace/Nutzungsbedingungen	-
dc.subject	E58	-
dc.subject	E52	-
dc.subject	E63	-
dc.subject	ddc:330	-
dc.subject	Adaptive Learning	-
dc.subject	Monetary Policy	-
dc.subject	Fiscal Policy	-
dc.subject	Zero Interest Rate Lower Bound	-
dc.subject	Indeterminacy	-
dc.title	Liquidity Traps, Learning and Stagnation	-
dc.type	doc-type:workingPaper	-
Appears in Collections:	EconStor

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