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We provide a quantitative theory of deflation and secular stagnation. In our lifecycle framework, an aging population … puts persistent downward pressure on the price level, real interest rates, and output. A novel feature of our theory is …
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We study the interaction of multiple large economies in dynamic stochastic general equilibrium. Each economy has a monetary policymaker that attempts to control the economy through the use of a linear nominal interest rate feedback rule. We show how the determinacy of worldwide equilibrium...
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