This staff memo revisits the power of forward guidance with particular emphasis on the effectiveness of anticipated policy in Norges Bank’s main policy model NEMO. First we explain, within the context of a simple toy model, why and how forward guidance has implausible effects in standard...

This staff memo revisits the power of forward guidance with particular emphasis on the effectiveness of anticipated policy in Norges Bank's main policy model NEMO. First we explain, within the context of a simple toy model, why and how forward guidance has implausible effects in standard...