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What to expect from the lower bound on interest rates: Evidence from derivatives prices
Mertens, Thomas M.; Williams, John C. - 2018
time, whereas in the "liquidity trap equilibrium", policy is mostly or always constrained. We use options data on future … the target equilibrium and find no evidence in favor of the liquidity trap equilibrium. Quantitatively, while the lower …
Persistent link: https://www.econbiz.de/10012144708
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Tying down the anchor: Monetary policy rules and the lower bound on interest rates
Mertens, Thomas M.; Williams, John C. - 2019
This paper uses a standard New Keynesian model to analyze the effects and implementation of various monetary policy frameworks in the presence of a low natural rate of interest and a lower bound on interest rates. Under a standard inflation-targeting approach, inflation expectations will be...
Persistent link: https://www.econbiz.de/10012144730