Replication data for: Liquidity Traps and Jobless Recoveries
Principal Investigator(s): View help for Principal Investigator(s) Stephanie Schmitt-Grohé; Martín Uribe
Version: View help for Version V1
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| MAC2015-0220_data | 10/12/2019 08:07:PM | ||
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text/plain | 14.6 KB | 10/12/2019 04:07:PM |
Project Citation:
Schmitt-Grohé, Stephanie, and Uribe, Martín. Replication data for: Liquidity Traps and Jobless Recoveries. Nashville, TN: American Economic Association [publisher], 2017. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E114127V1
Project Description
Summary:
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This paper proposes a model that explains the joint occurrence of liquidity traps and jobless growth recoveries. Its key elements are downward nominal wage rigidity, a Taylor-type interest rate feedback rule, the zero lower bound on nominal interest rates, and a confidence shock. Absent a change in policy, the model predicts that low inflation and high unemployment become chronic. With capital accumulation, the model predicts, in addition, an investment slump. The paper identifies a New Fisherian effect, whereby raising the nominal interest rate to its intended target for an extended period of time can boost inflationary expectations and thereby foster employment.
Scope of Project
JEL Classification:
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E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
E31 Price Level; Inflation; Deflation
E32 Business Fluctuations; Cycles
E43 Interest Rates: Determination, Term Structure, and Effects
E52 Monetary Policy
F44 International Business Cycles
G01 Financial Crises
E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
E31 Price Level; Inflation; Deflation
E32 Business Fluctuations; Cycles
E43 Interest Rates: Determination, Term Structure, and Effects
E52 Monetary Policy
F44 International Business Cycles
G01 Financial Crises
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