DEPARTMENT OF ECONOMICS Working Paper Aggregate Demand , Functional Finance and Secular Stagnation
نویسنده
چکیده
This paper makes three main points. Fiscal policy, rst, may be needed in the long run to maintain full employment and avoid secular stagnation. If scal policy is used in this way, second, the long-run debt ratio depends (i) inversely on the rate of growth, (ii) inversely on government consumption, and (iii) directly on the degree of inequality. The analysis, third, suggests that policies and policy debates have been misguided. The recent rediscovery of secular stagnation by Summers and others should be welcomed, but the suggested theoretical redirection is unclear and does not go far enough. JEL classi cation: E62, E22 Key words: functional nance, zero lower bound, liquidity trap, scal policy, secular stagnation, austerity, public debt.
منابع مشابه
Aggregate Demand, Functional Finance and Secular Stagnation
This paper makes three main points. Fiscal policy, rst, may be needed in the long run to maintain full employment and avoid secular stagnation. If scal policy is used in this way, second, the long-run debt ratio depends (i) inversely on the rate of growth, (ii) inversely on government consumption, and (iii) directly on the degree of inequality. The analysis, third, suggests that policies and ...
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