Stagnation Traps

• 成果类型: Article
• 署名作者: Benigno, Gianluca; Fornaro, Luca
• 署名单位: University of London; London School Economics & Political Science; Centre for Economic Policy Research - UK; Centre de Recerca en Economia Internacional (CREI); Barcelona School of Economics; Pompeu Fabra University; Center for Economic & Policy Research (CEPR)
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdx063
• 发表日期: 2018
• 页码: 1425-1470
• 关键词: monetary-policy; intertemporal substitution; wage; GROWTH; indeterminacy; expectations; COMPETITION; real

摘要

We provide a Keynesian growth theory in which pessimistic expectations can lead to very persistent, or even permanent, slumps characterized by high unemployment and weak growth. We refer to these episodes as stagnation traps, because they consist in the joint occurrence of a liquidity and a growth trap. In a stagnation trap, the central bank is unable to restore full employment because weak growth depresses aggregate demand and pushes the policy rate against the zero lower bound, while growth is weak because low aggregate demand results in low profits, limiting firms' investment in innovation. Aggressive policies aiming at restoring growth, such as subsidies to investment, can successfully lead the economy out of a stagnation trap by generating a regime shift in agents' growth expectations.