Secular Stagnation in the Open Economy / Gauti B. Eggertsson, Neil R. Mehrotra, Lawrence H. Summers.

Format:

Book

Author/Creator:

Eggertsson, Gauti B.

Contributor:

National Bureau of Economic Research.

Mehrotra, Neil R.

Summers, Lawrence H.

Series:

Working Paper Series (National Bureau of Economic Research) no. w22172.

NBER working paper series no. w22172

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2016.

Summary:

Conditions of secular stagnation - low interest rates, below target inflation, and sluggish output growth - now characterize much of the global economy. We consider a simple two-country textbook model to examine how capital markets transmit secular stagnation and to study policy externalities across countries. We find capital flows transmit recessions in a world with low interest rates and that policies that trigger current account surpluses are beggar-thy-neighbor. Monetary expansion cannot eliminate a secular stagnation and may have beggar-thy-neighbor effects, while sufficiently large fiscal interventions can eliminate a secular stagnation and carry positive externalities.

Notes:

Print version record

April 2016.