Discussion Paper
No. 2014-47 | November 19, 2014
Biagio Bossone
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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