Recovering Effectiveness of Monetary Policy under a Deflationary Environment
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| Natura: | Artículo científico |
| Lingua: | en |
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Universidad Nacional Autónoma de México
2008
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| _version_ | 1876439656602533888 |
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| author | Helder Ferreira de Mendonça |
| author_facet | Helder Ferreira de Mendonça |
| contents | Recovering Effectiveness of Monetary Policy under a Deflationary Environment Helder Ferreira de Mendonça Gabriel Caldas Montes Economía y Finanzas deflation Pigou effect Fiscal policy liquidity preference This paper presents a Keynesian model where a fall in autonomous demand couldimply a fall in prices that deepens the initial recession, even in the presence of flexibleprices, flexible wages, and free market forces. In other words, the hypothesis of fullyflexible prices and wages is insufficient for the original equilibrium to return in anenvironment with liquidity preference of economic agents. The findings denote thatfiscal policy would be an important instrument in stabilizing expectations, prices, andoutput, preventing the economy from deflationary evil 2008 artículo científico 0185-1667 https://www.redalyc.org/articulo.oa?id=60126504 en http://www.redalyc.org/revista.oa?id=601 Investigación Económica application/pdf Universidad Nacional Autónoma de México Investigación Económica (México) Num.265 Vol.LXVII |
| format | Artículo científico |
| id | redalyc_60126504 |
| institution | Redalyc |
| language | en |
| publishDate | 2008 |
| publisher | Universidad Nacional Autónoma de México |
| spellingShingle | Recovering Effectiveness of Monetary Policy under a Deflationary Environment Helder Ferreira de Mendonça Economía y Finanzas deflation Pigou effect Fiscal policy liquidity preference Recovering Effectiveness of Monetary Policy under a Deflationary Environment Helder Ferreira de Mendonça Gabriel Caldas Montes Economía y Finanzas deflation Pigou effect Fiscal policy liquidity preference This paper presents a Keynesian model where a fall in autonomous demand couldimply a fall in prices that deepens the initial recession, even in the presence of flexibleprices, flexible wages, and free market forces. In other words, the hypothesis of fullyflexible prices and wages is insufficient for the original equilibrium to return in anenvironment with liquidity preference of economic agents. The findings denote thatfiscal policy would be an important instrument in stabilizing expectations, prices, andoutput, preventing the economy from deflationary evil 2008 artículo científico 0185-1667 https://www.redalyc.org/articulo.oa?id=60126504 en http://www.redalyc.org/revista.oa?id=601 Investigación Económica application/pdf Universidad Nacional Autónoma de México Investigación Económica (México) Num.265 Vol.LXVII |
| title | Recovering Effectiveness of Monetary Policy under a Deflationary Environment |
| topic | Economía y Finanzas deflation Pigou effect Fiscal policy liquidity preference |
| url | https://www.redalyc.org/articulo.oa?id=60126504 |