Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/155454
Authors: 
Boianovsky, Mauro
Year of Publication: 
2016
Series/Report no.: 
CHOPE Working Paper 2016-25
Abstract: 
Knut Wicksell's concept of the natural (or neutral) rate of interest, introduced between the end of the 19th and beginning of the 20th centuries, has played an important role in modern monetary macroeconomics, especially after the development of inflation targeting policy in the 1990s. More recently, the revival of Alvin Hansen's 1939 secular stagnation hypothesis by Larry Summers and others has brought to the fore the notion of a negative natural rate of interest, in the sense that there is no positive rate of interest able to equilibrate saving and investment at full-employment income. The present paper investigates whether the negative natural rate of interest may be found in Wicksell. It also examines in what extent the idea of secular stagnation is compatible with his original theoretical framework.
Subjects: 
Wicksell
secular stagnation
natural rate of interest
Hansen
population growth
JEL: 
B13
B22
E32
E40
Document Type: 
Working Paper

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