Scheer, Alexander Müller, Gernot Kriwoluzky, Alexander
Year of Publication:
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2017: Alternative Geld- und Finanzarchitekturen - Session: Business Cycles II G07-V3
Financial repression allows governments to borrow at artificially low interest rates. Quantifying financial repression is challenging, because it relies on an estimate of the interest rate which would prevail in the absence of repression. In this paper, we put forward a quantitative business cycle model which features financial repression. We estimate the model on US times series for the period 1948-1979 in order to quantify the extent of financial repression and its impact on the economy.