##nchas ( 2015 ). see rey, h. ( 2013 ) “ dilemma not trilemma : the global financial cycle and monetary policy independence ”, kansas fed, jackson hole conference. see bernanke, b. ( 2005 ), ( 2007 ) and ( 2010 ). see caballero, r. j., e. farhi and p - o. gourinchas ( 2015 ), “ global imbalances and currency wars at the zlb ” nber working paper no 21670, october 2015. bis central bankers ’ speeches adopting a very expansionary monetary policy earlier, was able to benefit from a depreciating u. s. dollar ( usd ), but this changed after 2014 when both europe and japan embarked also in a more expansionary unconventional monetary policies. due to a non - ricardian treatment of public finances, there is a role for fiscal policy in dealing with the situation. the paper also finds that countries with more wage and price flexibility have a smaller share of the world recessionary trend but “ at the global level, more downward price or wage flexibility exacerbates the global recession ”. the idea of a prolonged global liquidity trap is connected with the notion of secular stagnation, i. e. the possibility of a prolonged situation of low inflation and low growth at the global level. the secular stagnation hypothesis in this case refers to the demand - side version promoted by larry summers 8, where a trend of planned savings systematically higher than planned investment implies a situation of persistent lack of demand and a negative output gap, interest rate at the lb and low inflation or even deflation. the real equilibrium rate that ensures the savings investment balance at full employment may indeed become negative as recent estimates for the u. s. indicate. eggertsson and mehrotra ( 2014 ) and caballero and farhi ( 2015 ) modelled secular stagnation in a closed economy and more recently, eggertsson, mehrotra, singh and summers ( 2015 ) 9 presented a model of secular stagnation in a multi - country context in which exit policies may include a global increase of the inflation target ( if made credible ), fiscal policy stimulus or capital controls for the countries with a domestic positive real equilibrium interest rate. the effectiveness of both monetary and fiscal policy is strongly amplified by possible international co - ordination of their use. some exit solutions the whole literature on global liquidity traps provides an overall consistent view of

o. and l. summers ( 1986 ), “ hysteresis and the european unemployment problem ”, nber macroeconomics annual, vol. 1. see gordon, r. j. ( 2016 ), “ the rise and fall of american growth : the u. s. standard of living since the civil war ”, princeton university press. see mokyr, j. ( 2013 ), “ is technological progress a thing of the past? ”, voxeu article, 8 september 2013 and brynjolfsson, e. and a. mcafee ( 2014 ), “ the second machine age : work, progress, and prosperity in a time of brilliant technologies ”. bis central bankers ’ speeches an uphill battle, given the challenges of population aging, rising inequality, failing education systems and debt overhang. the role of demographics is especially dominant here. as charles goodhart and colleagues ( 2015 ) have noted, recent decades have benefitted from a positive global labour supply shock, deriving from the baby - boomer generation in the 1970s, and from the integration and expansion of emerging markets as part of the global economy. these demographic headwinds are fading out, implying that another crucial source of growth is drying - up, at least until a demographic reversal takes place in about 25 to 30 years ’ time. 17 beyond these factors, doubts can also be raised about the depth of the economic traction of the innovations that are in the pipeline. the technological changes at the turn of the 20th century and after the second world war, led to the creation of mass products widely used in association with the urbanisation explosion that is about to end. the second wave of income growth was triggered by women ’ s participation in the labour force and jump in education levels, developments that cannot now be repeated to the same degree. so far, the new products or services associated with the digital economy have not a similar impact on jobs and income. part of their value is not even paid for in a market, as is the case with the internet or social media. to count these and other intangibles which clearly improve our lives and personal productivity, would only be justified in an indicator of well - being but not in a gdp concept that aims to measure traded goods and services that generate monetary income and consequently, jobs. robotics is expected to introduce an important new wave of innovation, but that will only make the question of jobs more complicated, requiring significant and difficult changes in the income redistribution systems