Replication data for: A Model of Secular Stagnation: Theory and Quantitative Evaluation
Principal Investigator(s): View help for Principal Investigator(s) Gauti B. Eggertsson; Neil R. Mehrotra; Jacob A. Robbins
Version: View help for Version V1
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Project Citation:
Eggertsson, Gauti B., Mehrotra, Neil R., and Robbins, Jacob A. Replication data for: A Model of Secular Stagnation: Theory and Quantitative Evaluation. Nashville, TN: American Economic Association [publisher], 2019. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E114159V1
Project Description
Summary:
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This paper formalizes and quantifies the secular stagnation hypothesis, defined as a persistently low or negative natural rate of interest leading to a chronically binding zero lower bound (ZLB). Output-inflation dynamics and policy prescriptions are fundamentally different from those in the standard New Keynesian framework. Using a 56-period quantitative life cycle model, a standard calibration to US data delivers a natural rate ranging from −1.5% to −2%, implying an elevated risk of ZLB episodes for the foreseeable future. We decompose the contribution of demographic and technological factors to the decline in interest rates since 1970 and quantify changes required to restore higher rates.
Scope of Project
JEL Classification:
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E12 General Aggregative Models: Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
E23 Macroeconomics: Production
E31 Price Level; Inflation; Deflation
E32 Business Fluctuations; Cycles
E43 Interest Rates: Determination, Term Structure, and Effects
E52 Monetary Policy
E12 General Aggregative Models: Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
E23 Macroeconomics: Production
E31 Price Level; Inflation; Deflation
E32 Business Fluctuations; Cycles
E43 Interest Rates: Determination, Term Structure, and Effects
E52 Monetary Policy
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