Mian, Atif R.; Straub, Ludwig; Sufi, Amir - 2022
We propose a theory of indebted demand, capturing the idea that large debt burdens by households and governments lower … aggregate demand, and thus natural interest rates. At the core of the theory is the simple yet under-appreciated observation … lead to indebted household demand, pushing down natural interest rates. Moreover, popular expansionary policies—such as …