This paper identifies zero lower bound risk as key rationale for a monetary policymaker to actively manage the size and composition of its holdings of domestic debt. This is true at all times, including when the zero lower bound does not currently bind. It then provides a simple, optimal rule...

This paper contributes to the policy evaluation literature by developing new strategies to study alternative policy rules. We compare optimal rules to simple rules within canonical monetary policy models. In our context, an optimal rule represents the solution to an intertemporal optimization...

In this paper we perform a meta-analysis of the effects of monetary policies on output and prices. We use a sample of published papers on the effects of monetary policies in different countries. There is a large variation in the estimated effects of monetary policies on output and prices. We...

In this paper we perform a meta-analysis of the effects of monetary policies on output and prices. We use a sample of published papers on the effects of monetary policies in different countries. There is a large variation in the estimated effects of monetary policies on output and prices. We...

This paper examines the interactions of macroprudential and monetary policies. We find, using a range of macroeconomic models used at the European Central Bank, that in the long run, a 1% bank capital requirement increase has a small impact on GDP. In the short run, GDP declines by 0.15-0.35%....

Crises are a major driving force behind cooperation in the European Union. This holds also for monetary and fiscal policy. During severe crises, cooperation has been enlarged and intensified. The recent covid-19 pandemic is a clear example of this pattern. The pandemic has had huge impact on the...

The Federal Open Market Committee raised the target range for the federal funds rate above the Effective Lower Bound in March 2022 for the first time since March 2020 and projected six more rate increases in 2022. The Committee’s actions follow the August 2020 revised Statement on Longer-Run...

This paper assesses the role that monetary policy plays in the decision to default using a General Equilibrium model with collateralized loans, trade in fiat money and production. Long-term nominal loans are backed by collateral, the value of which depends on monetary policy. The decision to...

We study nominal GDP targeting as optimal monetary policy in a model with a credit market friction following Azariadis, Bullard, Singh and Suda (2018), henceforth ABSS. As in ABSS, the macroeconomy we study has considerable income inequality which gives rise to a large private sector credit...

We propose a two-step approach to estimate multi-dimensional monetary policy shocks and their causal effects requiring only daily financial market data and policy events. First, we combine a heteroscedasticity-based identification scheme with recursive zero restrictions along the term structure...