Escaping secular stagnation may be possible by winning a currency war, but the outcome could be to “beggar thy self” rather than “beggar thy neighbour”, according to a staff working paper published by the Bank of England.

Step away from the zero lower bound builds on recent work on the global negative spillovers caused by efforts to escape secular stagnation, instead looking at the domestic equilibrium. Giancarlo Corsetti, Eleonora Mavroeidi, Gregory Thwaites and Martin Wolf build a framework