The effect of a decline in the world real interest rate on a small open economy experiencing persistent stagnation

Ryu-ichiro Murota

Economics Letters, 2022, vol. 216, issue C

Abstract: This paper develops a small open economy model where a strong liquidity preference causes persistent stagnation and shows that a decline in the world real interest rate worsens the stagnation if the rate is already low enough.

Keywords: Persistent stagnation; Small open economy; World real interest rate (search for similar items in EconPapers)
JEL-codes: E12 E24 F41 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:216:y:2022:i:c:s0165176522001744

DOI: 10.1016/j.econlet.2022.110588

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