(2005) estimated that over a period before monetary policy hit the zero bound, it would take a 100 basis point surprise cut in the target funds rate to lower ten-year Treasury yields

In summary, when the zero bound restricts a central bank’s ability to ease policy by lowering its target interest rate, there may still be con- siderable scope for a central bank

The dependence of the size of the consumption losses on the steady state real interest rate, displayed in fi gure 1, suggests that the lower bound in fl icts sizable welfare

This is illustrated in fi gure 1, which reports the increase in the consumption losses associated with taking into account the zero lower bound under discretionary policy, as a

In this paper, we build on Svensson’s (1997) inflation targeting framework by explicitly taking into account the lagged effect of monetary policy and characterize the optimal

This would help communicate to markets how it is that the purchase program is consistent with a steady state with inflation at target and output at potential.. This would

whose growth is affected by policy, two alternative forms of insurance against encountering the ZLB are available to an activist policy-maker: building a buffer of inflation and

Key words: Monetary policy; Zero interest rates; Long-term interest rates; Inflation targeting; Outright purchase of government bonds; Quantitative easing; Excess reserves; Base

In this paper we have used a simple, two equation model of a closed economy, augmented with an asset-price bubble, to investigate what impact the zero lower bound on nominal

Potencialno odzivnost obrestnih mer oziroma tržnih donosnosti državnih obveznic Nemčije, Italije in Španije na objave makroekonomskih podatkov smo merili s pomočjo regresijske enačbe,

The aim of large-scale asset purchases is to lower long-term interest rates. Given that short- term rates are already at the zero lower bound, this amounts to a flattening of

Keywords : monetary policy rules, zero-interest-rate bound, liquidity trap, rational expec- tations, nominal rigidities, exchange rates, monetary transmission.. ∗

Adjustment of the supply of base money while the zero bound is binding, so as to keep the monetary base proportional to the target price level rather than the actual current

We analyse the macroeconomic effects of a protracted period of low and falling inflation rates when monetary policy is constrained by the zero lower bound (ZLB) on nominal

A 100 basis point (bp) increase in the two-year nominal yield on a Federal Open Markets Committee (FOMC) announcement day, which we use as a proxy for changes in

The aim of large-scale asset purchases is to lower long-term interest rates. Given that short- term rates are already at the zero lower bound, this amounts to a flattening of

Instead of attempting to raise infl ation expectations, central banks sought to lower interest rates further along the yield curve by providing more certainty about policy rates

Keywords: monetary policy rules, zero interest rate bound, liquidity trap, rational expectations, nominal rigidities, exchange rates, monetary transmission...