Expectations-Driven Liquidity Traps: Implications for Monetary and Fiscal Policyt

• 成果类型: Article
• 署名作者: Nakata, Taisuke; Schmidt, Sebastian
• 署名单位: University of Tokyo; European Central Bank; Center for Economic & Policy Research (CEPR)
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20190228
• 发表日期: 2022
• 页码: 68-103
• 关键词: zero; COMMITMENT; perils

摘要

We study optimal time-consistent monetary and fiscal policy in a New Keynesian model where occasional declines in agents' confi-dence give rise to persistent liquidity trap episodes. Insights from widely studied fundamental-driven liquidity traps are not a useful guide for enhancing welfare in this model. Raising the inflation tar-get, appointing an inflation-conservative central banker, or allowing for the use of government spending as an additional stabilization tool can exacerbate deflationary pressures and demand deficiencies during the liquidity trap episodes. However, appointing a policy -maker who is sufficiently less concerned with government spending stabilization than society eliminates expectations-driven liquidity traps. (JEL E31, E52, E61, E62, E63)