Veranstaltungen des DIW Berlin/
Events of DIW Berlin

21 October 2015

DIW Seminar on Macroeconomics and Econometrics Stagnation Traps

We provide a Keynesian growth theory in which pessimistic expectations can lead to permanent, or very persistent, slumps characterized by unemployment and weak growth. We refer to these episodes as stagnation traps, because they consist in the joint occurrence of a liquidity and a growth trap. In a stagnation trap, the central bank is unable to restore full employment because weak growth pushes the interest rate against the zero lower bound, while growth is weak because low aggregate demand results in low profits, limiting firms’ investment in innovation. Policies aiming at restoring growth can successfully lead the economy out of a stagnation trap, thus rationalizing the notion of job creating growth. 

More Information
Speaker
  • Luca Fornaro, CREI/Pompeu Fabra

  • Time
    12:00 - 13:15
    Location
    DIW Berlin (Gustav-Schmoller-Raum) DIW Berlin im Quartier 110 Room 3.3.002A Mohrenstraße 58 10117 Berlin
    Contact(s)
    at DIW Berlin
    Tel.: +49 30 89789 420
    Tel.: +49 30 89789 492