Stagnation traps
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- dc.contributor.author Benigno, Gianluca
- dc.contributor.author Fornaro, Luca
- dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
- dc.date.accessioned 2020-05-25T09:27:09Z
- dc.date.available 2020-05-25T09:27:09Z
- dc.date.issued 2015-01-01
- dc.date.modified 2020-05-25T09:24:41Z
- dc.description.abstract We provide a Keynesian growth theory in which pessimistic expectations can lead to very persistent, or even permanent, slumps characterized by unemployment and weak growth. We refer to these episodes as stagnation traps, because they consist in the joint occurrence of a liquidity and a growth trap. In a stagnation trap, the central bank is unable to restore full employment because weak growth depresses aggregate demand and pushes the interest rate against the zero lower bound, while growth is weak because low aggregate demand results in low profits, limiting firms' investment in innovation. Policies aiming at restoring growth can successfully lead the economy out of a stagnation trap, thus rationalizing the notion of job creating growth.
- dc.format.mimetype application/pdf*
- dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1487
- dc.identifier.citation Review of Economic Studies, 85 (3), 2018, 1425-1470
- dc.identifier.uri http://hdl.handle.net/10230/23808
- dc.language.iso eng
- dc.relation.ispartofseries Economics and Business Working Papers Series; 1487
- 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 secular stagnation
- dc.subject.keyword liquidity traps
- dc.subject.keyword growth traps
- dc.subject.keyword endogenous growth
- dc.subject.keyword multiple equilibria.
- dc.subject.keyword Macroeconomics and International Economics
- dc.title Stagnation traps
- dc.title.alternative
- dc.type info:eu-repo/semantics/workingPaper