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Counter-cyclical fiscal rules and the zero lower bound
Hauptmeier, Sebastian; Kamps, Christophe; Radke, Lucas - 2022
economic activity, inflation and government debt in face of an occasionally binding lower bound on the nominal interest rate in … policy, the optimal fiscal policy rule features a strong counter-cyclical response to the deviation of inflation from the … inflation significantly improves welfare and reduces the lower-bound frequency. In addition, the optimal simple monetary and …
Persistent link: https://www.econbiz.de/10013342236
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Aggregate uncertainty, HANK, and the ZLB
Lin, Alessandro; Peruffo, Marcel - 2024
We propose a novel methodology for solving Heterogeneous Agents New Keynesian (HANK) models with aggregate uncertainty and the Zero Lower Bound (ZLB) on nominal interest rates. Our efficient solution strategy combines the sequence-state Jacobian methodology in Auclert et al. (2021) with a...
Persistent link: https://www.econbiz.de/10014490447
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Monetary policy and the drifting natural rate of interest
Daudignon, Sandra; Tristani, Oreste - 2023
policy is not constrained by the ZLB. The neutral rate - the level of the policy rate consistent with stable inflation and …
Persistent link: https://www.econbiz.de/10013553542
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Macroeconomic effects of tariffs shocks : the role of the effective lower bound and the labour market
Jacquinot, Pascal; Lozej, Matija; Pisani, Massimiliano - 2020
We simulate a version of the EAGLE, a New Keynesian multi-country model of the world economy, to assess the macroeconomic effects of US tariffs imposed on one country member of the euro area (EA), and the rest of the world (RW). The model is augmented with an endogenous effective lower bound...
Persistent link: https://www.econbiz.de/10012241231
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The (ir)relevance of the nominal lower bound for real yield curve analysis
Schupp, Fabian - 2020
, premium components are less reactive to a typical 10 bp increase in inflation, while real rate responses change their sign …
Persistent link: https://www.econbiz.de/10012299079
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Expectations-driven liquidity traps : implications for monetary and fiscal policy
Nakata, Taisuke; Schmidt, Sebastian - 2019
We study optimal monetary and fiscal policy in a New Keynesian model where occasional declines in agents' confidence can give rise to persistent liquidity trap episodes. Unlike in the case of fundamental-driven liquidity traps, there is no straightforward recipe for mitigating the welfare costs...
Persistent link: https://www.econbiz.de/10012037377
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Bank capital regulation in a zero interest environment
Döttling, Robin - 2020
How do near-zero interest rates affect optimal bank capital regulation and risk-taking? I study this question in a dynamic model, in which forward-looking banks compete imperfectly for deposit funding, but households do not accept negative deposit rates. When deposit rates are constrained by the...
Persistent link: https://www.econbiz.de/10012241108
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(Un)conventional policy and the effective lower bound
De Fiore, Fiorella; Tristani, Oreste - 2018
We study the optimal combination of conventional (interest rates) and unconventional (credit easing) monetary policy in a model where agency costs generate a spread between deposit and lending rates. We show that unconventional measures can be a powerful substitute for interest rate policy in...
Persistent link: https://www.econbiz.de/10011920963
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Below the zero lower bound : a shadow-rate term structure model for the euro area
Lemke, Wolfgang; Vladu, Andreea L. - 2017
We propose a shadow-rate term structure model for the euro area yield curve from 1999 to mid-2015, when bond yields had turned negative at various maturities. Yields in the model are constrained by a lower bound, but - as a special feature of our specification - the bound is allowed to change...
Persistent link: https://www.econbiz.de/10011635307
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Pricing of bonds and equity when the zero lower bound is relevant
Kick, Heinrich - 2017
important innovations. Firstly, allowing for structural shifts in inflation expectations. Secondly, accounting for the relevance … of sluggish growth, low inflation rates, interest rates close to zero and quantitative easing. …
Persistent link: https://www.econbiz.de/10011636269