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Inflation targets and the liquidity trap

Klaeffling, Matt; Perez, Victor Lopez - 2003

The presence of a lower bound of zero on nominal interest rates has important implications for the conduct of optimal monetary policy. Standard rational expectations models can have alternative steady states as well as non-unique laws of motion, i.e. there can be possible sunspot equilibria....

Persistent link: https://www.econbiz.de/10009635903

Zero lower bound

Coenen, Günter - 2003

such as the shortterm nominal interest rate, annual inflation and output. …

Persistent link: https://www.econbiz.de/10009635906

Swiss monetary policy targeting 1974 - 1996

Rich, Georg - 2003

adoption of monetary targets, the SNB was able to reduce the inflation trend to low levels. However, it was less successful in … preemptive policy stance. At the end of 1999, the SNB abandoned monetary targeting in favour of an approach based on inflation …

Persistent link: https://www.econbiz.de/10009635971

Price stability and monetary policy effectiveness when nominal interest rates are bounded at zero

Coenen, Günter; Orphanides, Athanasios; Wieland, Volker - 2003

target inﬂation rates as low as 2 percent. However, the effects of the constraint are non-linear with respect to the inﬂation … percent. The variability of output increases signiﬁcantly and that of inﬂation also rises somewhat. Also, we show that the … increasingly short of potential with lower inﬂation targets. …

Persistent link: https://www.econbiz.de/10009635983

The Great Depression and the Friedman-Schwartz hypothesis

Christiano, Lawrence; Motto, Roberto; Rostagno, Massimo - 2004

We evaluate the Friedman-Schwartz hypothesis that a more accommodative monetary policy could have greatly reduced the severity of the Great Depression. To do this, we first estimate a dynamic, general equilibrium model using data from the 1920s and 1930s. Although the model includes eight...

Persistent link: https://www.econbiz.de/10009636549

Exchange-rate policy and the zero bound on nominal interest rates

Coenen, Günter; Wieland, Volker - 2004

In this paper, we study the effectiveness of monetary policy in a severe recession and deﬂation when nominal interest rates are bounded at zero. We compare two alternative proposals for ameliorating the effect of the zero bound: an exchange-rate peg and price-level targeting. We conduct this...

Persistent link: https://www.econbiz.de/10009639404

Explicit inflation objectives and macroeconomic outcomes

Levin, Andrew T.; Natalucci, Fabio M.; Piger, Jeremy M. - 2004

We find evidence that adopting an explicit inflation objective plays a role in anchoring long-run inflation … expectations and in reducing the intrinsic persistence of inflation. For the period 1994-2003, private-sector long-run inflation … forecasts exhibit significant correlation with lagged inflation for a number of industrial economies, including the United …

Persistent link: https://www.econbiz.de/10009639437