Collateral constraints, the zero lower bound, and the debt–deflation mechanism
Stefano Neri () and
Alessandro Notarpietro ()
Economics Letters, 2019, vol. 174, issue C, 144-148
Negative cost-push shocks lead to lower inflation and higher output in normal times. These shocks are instead contractionary when collateral constraints interact with the zero lower bound, as the debt–deflation mechanism plays a key amplifying role. The effects are larger and more persistent when nominal wages cannot be reduced.
Keywords: Collateral constraints; Zero lower bound; Debt–deflation mechanism (search for similar items in EconPapers)
JEL-codes: E31 E37 E52 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:174:y:2019:i:c:p:144-148
Access Statistics for this article
Economics Letters is currently edited by Economics Letters Editorial Office
More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().