Murota, Ryu-ichiro; Ono, Yoshiyasu - 2015
We develop a Keynesian cross analysis with a dynamic optimization setting that explains long-run stagnation caused by … aggregate demand deficiency. We show that an increase in government purchases boosts GDP through a multiplier process, but the … through moderation of deflation. Thus, countries that have lapsed into long-run stagnation should expand government spending …