Explain how the inability of nominal interest rates to fall below zero can limit the effectiveness of monetary policy in stimulating borrowing and investment.

... intertemporal budget constraint considered in a Bewley economy (with a single asset). We also show parameterizations of our model in which we can obtain a ... Aug 29, 2022 ... site logo Join Economics · OR · Illustration of upvote icon after it is clicked · Hang on, you can't upvote just yet. · Illustration of upvote ... ... intertemporal budget constraint, has long been a concern. Download to read ... and C.E. Walsh, 1988, Common trends, the government budget constraint ... It does not respect intertemporal budget constraints and therefore cannot be microfounded in a dynamic model. It ignores the downward pressure on consumption ... US monthly data, for the period 1951-1984, are used to test a key element of the. Ricardian equivalence doctrine, namely the government's intertemporal budget. Oct 3, 2021 ... Imagine that income in the current period falls (moves to E'). All else being equal, use the line tool to draw the new intertemporal budget constraint. An intertemporal budget constraint is a graphical representation of an individual's trade-off between present and future consumption. It shows the combinations ... It does not address budget constraints: an impulse to demand from government spending comes out of thin air, rather than being offset by taxation or a cut. 1 ... Life is full of intertemporal choices: should I study for my test today or ... • Budget constraint in first period of life c1. + s = y1. + A. • Budget ... how is the deficit financed? • bond sales to the private sector or the central bank (money creation). • government inter-temporal ...