Fiscal policy under deflationary gap and long-run stagnation: Reinterpretation of Keynesian multipliers

Macroeconomic Interdependence Between a Stagnant and a Fully Employed Country

“…Then, only the second equation in , ∂ c /∂( p 1 g 1 ), is relevant and equals 0.26. This value equals that obtained by Murota and Ono (), where they treat a closed economy and use the same data set as the present one.…”

“…Murota and Ono () consider a preference for deposit holdings and show secular stagnation, zero nominal interest rates and excess reserves of commercial banks to appear. Murota and Ono () reformulate the model and propose a Keynesian‐multiplier‐like analysis with quite different implications from the conventioanl implications. Illing et al .…”

Aggregate demand deficiency, labor unions, and long‐run stagnation

“…This increase in consumption also raises the price change rate, which increases consumption again. See Murota and Ono (2015) for details. 34 Using the second equation of (A7), I find that the RHS of (A8) is decreasing in g: which implies that sufficiently large g violates (A8).…”

“… See Ono, Ogawa, and Yoshida () for empirical support of this assumption and Ono (, Chapter 1) and Murota and Ono , p. 598) for discussions about the validity of this assumption. …”

“…This increase in consumption also raises the price change rate, which increases consumption again. See Murota and Ono () for details.…”