The paradox of global thrift
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- dc.contributor.author Fornaro, Luca
- dc.contributor.author Romei, Federica
- dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
- dc.date.accessioned 2020-05-25T09:26:54Z
- dc.date.available 2020-05-25T09:26:54Z
- dc.date.issued 2016-12-01
- dc.date.modified 2020-05-25T09:25:37Z
- dc.description.abstract This paper describes a paradox of global thrift. Consider a world in which interest rates are low and monetary policy is constrained by the zero lower bound. Now imagine that governments implement prudential financial and fiscal policies to stabilize the economy. We show that these policies, while effective from the perspective of individual countries, might backre if applied on a global scale. In fact, prudential policies generate a rise in the global supply of savings and a drop in global aggregate demand. Weaker global aggregate demand depresses output in countries at the zero lower bound. Due to this effect, non-cooperative nancial and scal policies might lead to a fall in global output and welfare.
- dc.format.mimetype application/pdf*
- dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1609
- dc.identifier.citation American Economic Review, 109 (11), 2019, 3745-3779
- dc.identifier.uri http://hdl.handle.net/10230/44717
- dc.language.iso eng
- dc.relation.ispartofseries Economics and Business Working Papers Series; 1609
- dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
- dc.rights.accessRights info:eu-repo/semantics/openAccess
- dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
- dc.subject.keyword liquidity traps
- dc.subject.keyword zero lower bound
- dc.subject.keyword capital flows
- dc.subject.keyword fi scal policies
- dc.subject.keyword macroprudential policies
- dc.subject.keyword current account policies
- dc.subject.keyword aggregate demand externalities
- dc.subject.keyword international cooperation.
- dc.subject.keyword Macroeconomics and International Economics
- dc.title The paradox of global thrift
- dc.title.alternative
- dc.type info:eu-repo/semantics/workingPaper