Money and capital in a persistent liquidity trap

• 成果类型: Article
• 署名作者: Bacchetta, Philippe; Benhima, Kenza; Kalantzis, Yannick
• 署名单位: University of Lausanne; Centre for Economic Policy Research - UK; Swiss Finance Institute (SFI); European Central Bank; Bank of France
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2019.09.005
• 发表日期: 2020
• 页码: 70-87
• 关键词: Zero lower bound; liquidity trap; Asset scarcity; Deleveraging

摘要

Using a monetary model with asset scarcity, we show that a liquidity trap caused by a persistent deleveraging shock increases real cash holdings and decreases investment and output in the medium term. This medium-term supply-side effect arises when firms face financial constraints. Policy implications differ from shorter-run analyses implied by nominal rigidities. Quantitative easing leads to a deeper liquidity trap. Exiting the trap by increasing expected inflation or applying negative interest rates does not solve the asset scarcity problem. A higher government debt helps exiting the liquidity trap and reduces asset scarcity, but may hurt investment in the medium run. (C) 2019 Elsevier B.V. All rights reserved.y