(Dis)Solving the Zero Lower Bound Equilibrium through Income Policy
نویسندگان
چکیده
We investigate the possibility to reflate an economy experiencing a long-lasting zero lower bound episode with subdued or negative inflation by imposing minimum level of wage inflation. The income policy under investigation is formalized as downward nominal growth rigidity, such that cannot be than fraction target. This allows dissolving steady-state equilibrium in Overlapping Generations (OLG) model featuring “secular stagnation” and infinite-life model, where this emerges due deflationary expectations.
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ژورنال
عنوان ژورنال: Journal of Money, Credit and Banking
سال: 2021
ISSN: ['1538-4616', '0022-2879']
DOI: https://doi.org/10.1111/jmcb.12884