A New Explanation for Japan's Great Stagnation and Deflation

在停滞的流动性陷阱理论中，对一个经济体增长潜力的极度悲观会导致资产价格下跌和对流动性的近乎永无止境的需求。我的研究表明，传统的货币和支出乘数在污水坑条件下变得很小，而且不稳定。此外，基于可预测的结构和行为关系的标准动态模型(例如，DSSGE模型)在流动性池中没有预测能力。在这种极端情况下，传统的需求管理政策是无效的。政策的重点必须是通过可信的长期政策来恢复信心，以解决普遍悲观情绪的根本原因(S)。

In the liquidity sump theory of stagnation, extreme pessimism about an economy's growth potential results in a decline in asset prices and a nearly insatiable demand for liquidity. My research has shown that conventional money and expenditure multipliers become small and unstable in sump conditions. Furthermore, standard dynamic models(e. g. DSGE models) based on predictable structural and behavioral relationships have no predictive power in a liquidity sump. In such extreme conditions, conventional demand-management policies are ineffective. The focus of policy must be on restoring confidence through credible long-term policies that address the root cause(s) of generalized pessimism.