economies in terms of both output and inflation. In the case of a monetary union, we find that stabilisation of output in the … country where the financial shock originates is no longer as easy and, in terms of prices, there is now deflation in the … country where the crisis originated and a positive inflation rate in the other country. …

monetary policy objective. We find that for the price of a strong hike in inflation a severe economic recession can be avoided …

We show that policy uncertainty about how the rising public debt will be stabilized accounts for the lack of deflation …-lower-bound regime captures most of the comovements during the Great Recession: a deep recession, no deflation, and large fiscal …

We show that policy uncertainty about how the rising public debt will be stabilized accounts for the lack of deflation …-lower-bound regime captures most of the comovements during the Great Recession: a deep recession, no deflation, and large fiscal …

While high uncertainty is an inherent implication of the economy entering the zero lower bound, deflation is not … announcements by the fiscal and monetary authorities can lead to high inflation and large output losses. The policy trade-off can be …