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

Name	File Type	Size	Last Modified
Section-5			10/12/2019 08:27:PM
Section-8			10/12/2019 08:28:PM
master_readme.pdf	application/pdf	54 KB	10/12/2019 04:27:PM
readme_sec5.txt	text/plain	1.3 KB	10/12/2019 04:28:PM
readme_sec8.txt	text/plain	7.4 KB	10/12/2019 04:27:PM
readme_sec8data.txt	text/plain	3 KB	10/12/2019 04:27:PM

Project Description

Summary: 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:
      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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Published Versions

V1 [2019-10-12]

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