Dynamic debt deleveraging and optimal monetary policy
| Autor: | Pierpaolo Benigno, Federica Romei, Gauti B. Eggertsson |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2020 |
| Předmět: |
Inflation
media_common.quotation_subject 05 social sciences Monetary policy Zero lower bound 1. No poverty jel:E32 Post-Keynesian economics Monetary economics jel:E52 Overshoot (population) jel:E31 Debt 8. Economic growth 0502 economics and business New Keynesian economics Economics 050207 economics General Economics Econometrics and Finance Deleveraging 050205 econometrics media_common |
| Popis: | This paper proposes a postcrisis New Keynesian model that incorporates agent heterogeneity in borrowing and lending with a minimum set of assumptions. Unlike the standard framework, this model makes the natural rate of interest endogenous and dependent on macroeconomic policy. The main application is to study optimal monetary policy at the zero lower bound (ZLB). Such policy succeeds in raising the natural rate of interest by creating an environment that speeds up deleveraging and thus endogenously shortens the crisis and the duration of binding ZLB. Inflation should be front-loaded and should overshoot its long-term target during the ZLB episode. (JEL E12, E31, E32, E43, E52) |
| Databáze: | OpenAIRE |
| Externí odkaz: |
|