FORWARD GUIDANCE AND THE STATE OF THE ECONOMY

Autor:	Nathaniel A. Throckmorton, Benjamin D. Keen, Alexander W. Richter
Rok vydání:	2017
Předmět:	Economics and Econometrics 050208 finance 05 social sciences Zero lower bound Monetary policy General Business Management and Accounting Forward guidance Nominal interest rate Shock (economics) Economy Central bank Nonlinear model 0502 economics and business Economics State (computer science) 050207 economics
Zdroj:	Economic Inquiry. 55:1593-1624
ISSN:	0095-2583
DOI:	10.1111/ecin.12466
Popis:	This paper analyzes forward guidance in a nonlinear model with a zero lower bound (ZLB) on the nominal interest rate. Forward guidance is modeled with news shocks to the monetary policy rule, which capture innovations in expectations from central bank communication about future policy rates. Whereas most studies use quasi-linear models that disregard the expectational effects of hitting the ZLB, we show how the effectiveness of forward guidance nonlinearly depends on the state of the economy, the speed of the recovery, the degree of uncertainty, the policy shock size, and the forward guidance horizon when households account for the ZLB. (JEL E43, E58, E61)
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::2b131edb8d7140dd0f9129725ccdff05 https://doi.org/10.1111/ecin.12466 Zobrazit plný text záznamu Plný text ve formátu PDF Plný text ve formátu HTML
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