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Monetary and Fiscal Remedies for Deflation
Auerbach, Alan J. - 2011
Prevalent thinking about liquidity traps suggests that the perfect substitutability of money and bonds at a zero short-term nominal interest rate renders open-market operations ineffective for achieving macroeconomic stabilization goals. In an earlier paper, we showed that this reasoning does...
Persistent link: https://www.econbiz.de/10013133109
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Did France Cause the Great Depression?
Irwin, Douglas A. - 2010
deflation and associated economic contraction? While the tightening of U.S. monetary policy in 1928 is often blamed for having … worldwide deflation of 1929-33. The deflation could have been avoided if central banks had simply maintained their 1928 cover …
Persistent link: https://www.econbiz.de/10013138318
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Two Decades of Japanese Monetary Policy and the Deflation Problem
Ito, Takatoshi - 2012
This paper reviews Japanese monetary policy over the last two decades with an emphasis on the experience of deflation … of Japan's rhetoric was not helpful in fighting deflation, and the interest rate hike in August 2000 amid deflation was a … serious mistake. Deflation can be quite costly, and a key element in both preventing and escaping deflation is the management …
Persistent link: https://www.econbiz.de/10013100365
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Liquidity Traps and Expectation Dynamics : Fiscal Stimulus or Fiscal Austerity?
Benhabib, Jess - 2012
tailored in magnitude and duration, will insulate the economy from deflation traps. However "fiscal switching rules" that …
Persistent link: https://www.econbiz.de/10013106020
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Is the Phillips Curve Alive and Well after All? Inflation Expectations and the Missing Disinflation
Coibion, Olivier - 2013
We evaluate possible explanations for the absence of a persistent decline in inflation during the Great Recession and find commonly suggested explanations to be insufficient. We propose a new explanation for this puzzle within the context of a standard Phillips curve. If firms' inflation...
Persistent link: https://www.econbiz.de/10013073561
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Three Great American Disinflations
Bordo, Michael D. - 2007
effects of three episodes of deliberate monetary contraction: the post-Civil War deflation, the post-WWI deflation, and the …
Persistent link: https://www.econbiz.de/10012777317
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Exporting Deflation? Chinese Exports and Japanese Prices
Weinstein, David E. - 2010
period of deflation. We show that much of the correlation between import prices and domestic prices was due to formula biases …
Persistent link: https://www.econbiz.de/10012759379
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Deflationary Shocks and Monetary Rules : An Open-Economy Scenario Analysis
Laxton, Douglas - 2010
The paper considers the macroeconomic transmission of demand and supply shocks in an open economy under alternative assumptions on whether the zero interest floor (ZIF) is binding. It uses a two-country general-equilibrium simulation model calibrated to the Japanese economy vis-a-vis the rest of...
Persistent link: https://www.econbiz.de/10012760525
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Sudden Stops, Financial Crises and Leverage : A Fisherian Deflation of Tobin's Q
Mendoza, Enrique G. - 2008
which the ratio of debt to asset values raises enough to trigger the constraint. This sets in motion a deflation of Tobin …'s Q driven by Irving Fisher's debt-deflation mechanism, which causes a spiraling decline in credit access and in the price …
Persistent link: https://www.econbiz.de/10012769527
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Are Low Interest Rates Deflationary? A Paradox of Perfect-Foresight Analysis
García-Schmidt, Mariana - 2015
We illustrate a pitfall that can result from the common practice of assessing alternative monetary policies purely by considering the perfect foresight equilibria (PFE) consistent with the proposed rule. In a standard New Keynesian model, such analysis may seem to support the “Neo-Fisherian”...
Persistent link: https://www.econbiz.de/10013014293