play a key role in benefiting from the spillovers of these policies during risk-off episodes. Countries like Japan, which … already had very low long rates, benefited less. However, Japan still benefitted from the reduced persistence of risk …

. Monetary policy reaches an expansionary limit when it enters a liquidity trap. The model highlights a trade-off between worse …

We develop a new tractable model of banks' liquidity management and the credit channel of monetary policy. Banks … reserves. Deposit withdrawals are random, and banks manage liquidity risk by holding a precautionary buffer of reserves. We … greater liquidity risk. Through various tools, monetary policy affects the real economy by altering that trade-off. In a …