18 results with keyword: 'optimal monetary policy discretion zero bound nominal rates'
Optimal discretionary policy that targets an average inflation rate of zero implies that shocks to the so-called ‘natural’ real rate of interest cause the lower bound to become
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Third, as argued by Jung, Teranishi, and Watanbe (2001) and Eggertsson and Woodford (2003) optimal policy reacts to a binding zero lower bound on nominal interest rates by creating
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Third, as argued by Jung, Teranishi, and Watanabe (2001) and Eggerts- son and Woodford (2003) optimal policy reacts to a binding zero lower bound on nominal interest rates by
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“The Zero Bound on Nominal Interest Rates: Implications for the Optimal Monetary Policy in Canada.” Bank of Canada Discussion Paper No. “Strategic Complementarities and Optimal
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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
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Keywords : monetary policy rules, zero-interest-rate bound, liquidity trap, rational expec- tations, nominal rigidities, exchange rates, monetary transmission.. ∗
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The above discussion suggests that adopting a target path for the price level can effectively allow the central bank to achieve a lower average rate of inflation in the economy
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Keywords: monetary policy rules, zero interest rate bound, liquidity trap, rational expectations, nominal rigidities, exchange rates, monetary transmission...
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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
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Keywords: Optimal monetary policy, …nancial accelerator, lower bound on nominal interest rates, price-level targeting, …scal
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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
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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
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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
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Several intriguing results are obtained from the three identi fi ed MSVAR models estimated in this paper. The fi ndings may be summarized as follows. 1) There seems to be a
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from falling into a situation of zero nominal rates in the first place, the central bank should sustain a higher long-run average rate of inflation than would be the case without
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As one may in- fer from the aggregate-supply relation, equation (2), the higher is the degree of in fl ation indexation in the economy the more in fl ation has to be promised in
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Using a small micro-founded closed-economy model Eggertson and Woodford (2003) show that it is optimal for the central bank to com- mit to keeping nominal interest rates lower in
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Even though nominal interest rates are constrained at zero, the central bank may improve performance substantially by devaluing the exchange rate and switching to an exchange-rate
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