Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/270455 
Year of Publication: 
2022
Series/Report no.: 
Working Paper No. 2022-12
Publisher: 
Federal Reserve Bank of Atlanta, Atlanta, GA
Abstract: 
We provide a quantitative theory of deflation and secular stagnation. In our lifecycle framework, an aging population puts persistent downward pressure on the price level, real interest rates, and output. A novel feature of our theory is that it also recognizes the reactions of government policy. The central bank responds to falling prices by reducing its policy nominal interest rate, and the fiscal authority responds by allowing the public debt-gross domestic product ratio to rise.
Subjects: 
monetary policy
lifecycle
portfolio choice
secular stagnation
nominal government debt
aging
Tobin effect
fiscal policy
deflation
JEL: 
E52
E62
G51
D15
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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