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Uncovering the Effects of the Zero Lower Bound with an Endogenous Financial Wedge

发布日期:2021-09-30设置

【主题】Uncovering the Effects of the Zero Lower Bound with an Endogenous Financial Wedge

【报告人】聂光宇(上海财经大学商学院副教授)

【时间】929日(星期2:00-3:30 p.m.

【地点】上海财经大学高等研究院楼232

【语言】英文

【摘要】We study the effects of the Zero Lower Bound (ZLB) on the severity of financial crises using an incomplete markets New Keynesian model with two occasionally binding constraints: a ZLB on the nominal interest rate and a borrowing constraint tied to an asset price. The model's financial wedge corresponds to an endogenous multiplier on the borrowing constraint. Binding ZLB exacerbates financial crises through its interaction with the asset fire-sale vicious cycle, driving up the financial wedge. Our results offer a novel reinterpretation of the negligible effect of the ZLB in representative agent New Keynesian models with exogenous wedges.