Slow Post-financial Crisis Recovery and Monetary Policy

• 成果类型: Article
• 署名作者: Ikeda, Daisuke; Kurozumi, Takushi
• 署名单位: Bank of Japan
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20160048
• 发表日期: 2019
• 页码: 82-112
• 关键词: business cycles; GROWTH; frictions

摘要

Post-financial crisis recoveries tend to be slow and accompanied by slowdowns in total factor productivity (TFP) and permanent losses in GDP. To prevent them, how should monetary policy be conducted? We address this issue by developing a model with endogenous TFP growth in which an adverse financial shock can induce a slow recovery. In the model, a welfare-maximizing monetary policy rule features a strong response to output, and the welfare gain from output stabilization is much larger than when TFP expands exogenously. Moreover, inflation stabilization results in a sizable welfare loss, while nominal GDP stabilization works well, albeit causing high interest rate volatility.