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
DEPARTMENT OF ECONOMICS Working Paper 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 ...
متن کاملHow could the South respond to secular stagnation in the North ?
Developed countries face the risk of a sustained lack of aggregate demand, i.e. secular stagnation. Demand-oriented growth models emphasizing the balance-of-payments constraint raise concerns about attendant adverse growth impacts on developing countries from reduced export growth. These concerns are well-founded, albeit less serious than the simplest version of these models would imply. Relaxi...
متن کاملSecular stagnation, debt overhang and other rationales for sluggish growth, six years on
There is considerable controversy over why sluggish economic growth persists across many advanced economies six years after the onset of the financial crisis. Theories include a secular deficiency in aggregate demand, slowing innovation, adverse demographics, lingering policy uncertainty, post-crisis political fractionalisation, debt overhang, insufficient fiscal stimulus, excessive financial r...
متن کاملDemographic Dynamics and Long‐Run Development: Insights for the Secular Stagnation Debate*
This paper takes a global, long‐run perspective on the recent debate about secular stagnation, which has so far mainly focused on the short term. The analysis is motivated by observing the interplay between the economic and demographic transition that has occurred in the developed world over the past 150 years. To the extent that high growth rates in the past have partly been the consequence of...
متن کاملAdaptive aggregate production planning with fuzzy goal programming approach
Aggregate production planning (APP) determines the optimal production plan for the medium term planning horizon. The purpose of the APP is effective utilization of existing capacities through facing the fluctuations in demand. Recently, fuzzy approaches have been applied for APP focusing on vague nature of cost parameters. Considering the importance of coping with customer demand in different p...
متن کامل