100 years after Böhm-Bawerks death and nearly 70 years after Keynes has died there is still fundamental controversy about the factors which determine the interest rate in the long run. While Economists in the Austrian tradition see it as solely driven by real phenomena, Keynesian authors mainly...

How does the need to preserve government debt sustainability affect the optimal monetary and fiscal policy response to a liquidity trap? To provide an answer, we employ a small stochastic New Keynesian model with a zero bound on nominal interest rates and characterize optimal time-consistent...

How does the need to preserve government debt sustainability affect the optimal monetary and fiscal policy response to a liquidity trap? To provide an answer, we employ a small stochastic New Keynesian model with a zero bound on nominal interest rates and characterize optimal time-consistent...