The negative natural rate of interest in the modern theories of Liquidity Trap and Secular Stagnation: back to Böhm-Bawerk via Samuelson

Stefano Di Bucchianico

The European Journal of the History of Economic Thought, 2023, vol. 30, issue 1, 40-61

Abstract: The negative natural rate of interest is since two decades eliciting theoretical and policy debates. It re-emerged, after a relatively long time, in Krugman’s Liquidity Trap model. Later, it was placed at the hearth of the Secular Stagnation theory by Summers. It is argued that Krugman’s negative natural rate of interest ensues from theoretical premises analogous to those present in Samuelson’s overlapping-generations model. In turn, Samuelson obtained a negative equilibrium interest rate by opportunely recasting Böhm-Bawerk’s three causes for a positive rate of interest. The present paper illustrates and analyses this line of thought until its recent developments.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/09672567.2022.2108871 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:eujhet:v:30:y:2023:i:1:p:40-61

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/REJH20

DOI: 10.1080/09672567.2022.2108871

Access Statistics for this article

The European Journal of the History of Economic Thought is currently edited by José Luís Cardoso

More articles in The European Journal of the History of Economic Thought from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().