Why has Deflation Continued under Extraordinary Monetary Expansion?

Author Name KOBAYASHI Keiichiro (Faculty Fellow, RIETI)
Creation Date/NO. October 2019 19-P-028
Research Project Microeconomics, Macroeconomics, and Political Philosophy toward Economic Growth
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We propose a theoretical argument for a new rational expectations equilibrium hypothesis in the intergenerational economy, where each generation is intergenerationally altruistic and rational. The intergenerationally-rational expectations equilibrium implies that deflation can continue under an extreme increase in money supply.