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

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Eggertsson, Gauti B

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w22172.Publication details: Cambridge, Mass. National Bureau of Economic Research 2016.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: 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.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w22172 (Browse shelf(Opens below))	Not For Loan

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April 2016.

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.