The Stagnation Regime of the New Keynesian Model and Current US Policy∗
نویسنده
چکیده
In Evans, Guse, and Honkapohja (2008) the intended steady state is locally but not globally stable under adaptive learning, and unstable deflationary paths can arise after large pessimistic shocks to expectations. In the current paper a modified model is presented that includes a locally stable stagnation regime as a possible outcome arising from large expectation shocks. Policy implications are examined. Sufficiently large temporary increases in government spending can dislodge the economy from the stagnation regime and restore the natural stabilizing dynamics. More specific policy proposals are presented and
منابع مشابه
بررسی اثرات غیر خطی سیاست مالی بر مصرف خصوصی ایران در یک الگوی چرخش مارکوف با احتمال انتقال متغیر با زمان
If with expansionary (contractionary) fiscal policy, private consumption increases (decreases), fiscal policy has Keynesian nature else, it has non- Keynesian nature. If in certain period, sometimes fiscal policy has Keynesian effects and sometimes it has non- Keynesian effects, it will have non-linear effects. Since, there is not a paper about non- linear fiscal policy in IRAN, the purpose of ...
متن کاملInvestigating the asymmetric impact of monetary shocks on bank credits during business periods: (Serious Keynesian Perspective Test)
Monetary policy is one way of controlling economic fluctuations, and in recent years, developing countries (including Iran) have been particularly concerned with policymaking. For this reason, it is necessary to consider how these policies will affect the Iranian economy and its variables. It should also be examined whether the existence of inflationary conditions in the Iranian economy can hav...
متن کاملEvaluation of Monetary and Fiscal Policy Based on New Keynesian Dynamic General Equilibrium Model in Iran’s Economy
This paper examines monetary and fiscal policy through the estimation of a New-Keynesian dynamic general equilibrium model for Iran’s economy. In this New-Keynesian dynamic general equilibrium model, the consumers encounter the liquidity constraint and the firms face sticky prices, while they are changing them. In the model presented, a role is considered for both government spending and taxati...
متن کاملStock Market Bubbles and Business Cycles: A DSGE Model for the Iranian Economy
T his paper investigates the movement between stock market bubbles and fluctuations in aggregate variables within a DSGE model for the Iranian economy. We apply a new Keynesian monetary framework with nominal rigidity in wages and prices based on the study by Ikeda (2013), which is developed with appropriate framework for the Iranian economy. We consider central bank behavior differe...
متن کاملThe Relationship between Regime Change and lifestyle Change؛ Case study: US policies towards Iran
The article addresses the relationship between lifestyle change and change in the political regime which emphasizes the policies of the American government towards the Islamic Republic of Iran. Accordingly, this research aims to answer the main question is that “what is the relationship between lifestyle change and the regime change and how does the US seek to change the political system in Ir...
متن کامل