Dealing with a liquidity trap when government debt matters

Sebastian Schmidt

Research Bulletin, 2014, vol. 21, 8-11

Abstract: The experience of the recent global financial crisis has drawn attention to the question of how the appropriate monetary and fiscal policy stance in a liquidity trap is affected by the need to preserve government debt sustainability. The article summarises recent research that addresses this question in the context of a standard New Keynesian model. JEL Classification: E31, E52, E62, E63, D11

Keywords: monetary policy; fiscal policy; deficit spending; discretion; zero nominal interest rate bound (search for similar items in EconPapers)
Date: 2014-05
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Citations: View citations in EconPapers (32)

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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbrbu:2014:0021:2

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