A Model of Secular Stagnation: Theory and Quantitative Evaluation

公开
Creator Series Issue number
  • 742
Date Created
  • 2017-09-06
Abstract
  • This paper formalizes and quantifies the secular stagnation hypothesis, defined as a persistently low or negative natural rate of interest leading to a chronically binding zero lower bound (ZLB). Output-inflation dynamics and policy prescriptions are fundamentally different from those in the standard New Keynesian framework. Using a 56-period quantitative life cycle model, a standard calibration to US data delivers a natural rate ranging from -1.5% to -2%, implying an elevated risk of ZLB episodes for the foreseeable future. We decompose the contribution of demographic and technological factors to the decline in interest rates since 1970 and quantify changes required to restore higher rates.

Subject (JEL) 关键词 Related information Corporate Author
  • Federal Reserve Bank of Minneapolis. Research Department
Publisher
  • Federal Reserve Bank of Minneapolis
Resource type DOI
License

关联

属于 Collection:
最新修改

可下载的内容

下载PDF文件

Zipped Files

Download a zip file that contains all the files in this work.

单件