Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/103958
Authors: 
Bossone, Biagio
Year of Publication: 
2014
Series/Report no.: 
Economics Discussion Papers 2014-47
Abstract: 
This study analyzes the emergence of secular stagnation as the consequence of a rise in the preference for liquidity. Such a rise is caused by a persistent set of pessimistic expectations. This study also investigates the effectiveness of a broad range of demand-management policies in dealing with secular stagnation. To obtain these results, this study uses a model where agents derive utility from holding assets of different degrees of liquidity. In this environment, rational expectations interact with changes in market sentiment, to produce secular stagnation.
Subjects: 
helicopter money
liquidity preference
market sentiment
quantitative easing
pessimistic (optimistic) expectations
utility analysis
JEL: 
E2
E3
E4
E5
E61
E62
E63
G11
G12
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Working Paper

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