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Sharing the burden: monetary and fiscal responses to a world liquidity trap
Cook, David; Devereux, Michael B. - Federal Reserve Bank of Dallas - 2011
With integrated trade and financial markets, a collapse in aggregate demand in a large country can cause "natural real interest rates" to fall below zero in all countries, giving rise to a global "liquidity trap." This paper explores the optimal policy response to this type of shock, when...
Persistent link: https://www.econbiz.de/10009292929
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Export shocks and the zero bound trap
Fujiwara, Ippei - Federal Reserve Bank of Dallas - 2010
When a small open economy experiences a sufficiently large negative export shock, it is vulnerable to falling into a … zero bound trap. In addition, such a shock can have very large impact on the economy compared to the case when the zero …
Persistent link: https://www.econbiz.de/10008690997