Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/130410
Authors: 
van Aarle, Bas
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper 5797
Abstract: 
To analyse the most important aspects of the Secular Stagnation hypothesis, this paper considers the effects of hysteresis in potential output in a New-Keynesian model that is extended with endogenous potential output. To do so, a number of simulations of relevant scenarios is undertaken. It is demonstrated that extending the New-Keynesian model with hysteresis has a number of crucial implications for macro-economic adjustment and macro-economic management. It is indicated how the model can contribute to a better understanding of a number of important elements of the Secular Stagnation hypothesis.
Subjects: 
potential output hysteresis
monetary policy
fiscal policy
JEL: 
E31
E43
E62
H62
Document Type: 
Working Paper

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