Understanding Persistent ZLB: Theory and Assessment

• 成果类型: Article
• 署名作者: Cuba-Borda, Pablo; Singh, Sanjay R.
• 署名单位: Federal Reserve System - USA; Federal Reserve System Board of Governors; Federal Reserve System - USA; Federal Reserve Bank - San Francisco; University of California System; University of California Davis
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20210453
• 发表日期: 2024
• 页码: 389-416
• 关键词: expectations; indeterminacy; shocks

摘要

We develop a theoretical framework that rationalizes two hypoth-eses of long-lasting low-interest rate episodes: deflationary-expectations-traps and secular stagnation in a unified setting. These hypotheses differ in the sign of the theoretical correlation between inflation and output growth that they imply. Using the data from Japan over 1998:I-2019:IV, we find that the data favor the expectations-trap hypothesis. The superior model fit of the expec-tations trap relies on its ability to generate the observed negative correlation between inflation and output growth. (JEL E12, E31, E32, E43, E52)