Expectations and Policies in Deflationary Recessions

Luca Vittorio Angelo Colombo, Gerd Weinrich*

*Autore corrispondente per questo lavoro

Risultato della ricerca: Contributo in rivistaArticolo in rivistapeer review

Abstract

In this paper we use a non-tatonnement dynamic macroeconomic model to study the role of inventories,\r\nexpectations and wages in the business cycle. Following a restrictive\r\nmonetary shock, by amplifying spillover effects inventories may imply that\r\nthe economy converges to a deflationary locally stable Keynesian\r\nunderemployment state. The model is applied to evaluate economic policies\r\nlike quantitative easing as well as the effectiveness of holding\r\ninflationary expectations to recover to full employment. If inflationary\r\nexpectations are not sufficient, imposing downward rigidity of nominal wages\r\nhelps to exit from the recession.
Lingua originaleEnglish
pagine (da-a)224-250
Numero di pagine27
RivistaMetroeconomica
Numero di pubblicazioneFebruary
DOI
Stato di pubblicazionePubblicato - 2018

All Science Journal Classification (ASJC) codes

  • ???subjectarea.asjc.2000.2002???

Keywords

  • deflationary recessions
  • expectations
  • liquidity trap
  • non-neutrality of money
  • quantitative easing

Fingerprint

Entra nei temi di ricerca di 'Expectations and Policies in Deflationary Recessions'. Insieme formano una fingerprint unica.

Cita questo