Discussion Paper

No. 2014-47 | November 19, 2014
Secular Stagnation


This study analyzes the emergence of secular stagnation as the consequence of a rise in the preference for liquidity. Such a rise is caused by a persistent set of pessimistic expectations. This study also investigates the effectiveness of a broad range of demand-management policies in dealing with secular stagnation. To obtain these results, this study uses a model where agents derive utility from holding assets of different degrees of liquidity. In this environment, rational expectations interact with changes in market sentiment, to produce secular stagnation.

JEL Classification

E2 E3 E4 E5 E61 E62 E63 G11 G12

Cite As

Biagio Bossone (2014). Secular Stagnation. Economics Discussion Papers, No 2014-47, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2014-47


Comments and Questions

Anonymous - Referee Report 1
February 10, 2015 - 09:13

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Biagio Bossone - Reply to Referee Report 1
February 26, 2015 - 10:54

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Anonymous - Referee Report 2
February 26, 2015 - 10:55

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Biagio Bossone - Reply to Referee Report 2
March 23, 2015 - 10:12

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