Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/177722
Authors: 
van Wijnbergen, Sweder
Year of Publication: 
2018
Series/Report no.: 
Tinbergen Institute Discussion Paper TI 2018-032/VI
Abstract: 
What could be the drivers of low real rates? What are the implications of the Zero Lower Bound for economic policy? To discuss these questions we introduce a full general equilibrium model of the world economy with a simple (2 period) intertemporal structure. The model is simple enough to allow for full analytical solution yet sufficiently complex to allow us to address the impact of anticipated future productivity slow down, aging, structural reform and fiscal policy on real interest rates if markets clear and on aggregate economic activity if they do not because of the ZLB. We extend both the equilibrium model and the ZLB variant to a more-goods-per-period set up with complete specialization to address (real) exchange rate policy and the macroeconomic impact of trade tariffs.
Subjects: 
equilibrium real interest rates
aging
productivity change
the ZLB
real exchange rates
import tariffs
JEL: 
E62
F13
F40
F41
H30
Document Type: 
Working Paper
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