Secular stagnation, financial frictions, and land prices

• 成果类型: Article
• 署名作者: Cai, Zhifeng
• 署名单位: Rutgers University System; Rutgers University New Brunswick
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2021.10.001
• 发表日期: 2021
• 页码: 66-90
• 关键词: Secular stagnation; multiplicity; financial frictions; Land prices; Interest rates

摘要

We explore a model in which large transitory financial shocks can generate persistent slumps in output, land prices, and interest rate. The propagation channel works through a high sensitivity of land prices with respect to fundamental, achieved by a high complementarity between land services and consumption in households' preference. When this complementarity is disciplined by micro-level evidence, the equilibrium features nonlinear dynamics between two steady states. Large transitory financial shocks push the economy into a constrained region in which low interest rate makes firm unwilling to save out of the financial friction, leading to a secular stagnation. (JEL codes: E13, E32, E44) (c) 2021 Elsevier B.V. All rights reserved.