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The Fisher Effect under Deflationary Expectations

Glasner, David - 2013

The response of nominal and real interest rates to expected deflation becomes problematic when nominal interest rates … fall toward zero while the expected rate of deflation is increasing. As nominal interest rates approach their lower bound …, further increases in expected deflation cannot cause the nominal rate to fall. Either the Fisher equation is violated or the …

Persistent link: https://www.econbiz.de/10013093920

Betting the House

Jordà, Òscar - 2015

Is there a link between loose monetary conditions, credit growth, house price booms, and financial instability? This paper analyzes the role of interest rates and credit in driving house price booms and busts with data spanning 140 years of modern economic history in the advanced economies. We...

Persistent link: https://www.econbiz.de/10013031150

Exchange rate and price dynamics at the zero lower bound : conference paper

Bäurle, Gregor; Kaufmann, Daniel - 2013

In this paper, we analyse nominal exchange rate and price dynamics after risk shocks with short-term interest rates constrained by the zero lower bound (ZLB). We show with a stylized theoretical model that temporary risk shocks may lead to permanent shifts of the exchange rate and the price...

Persistent link: https://www.econbiz.de/10010340556

Negative Interest Rates, Capital Flows and Exchange Rates

Ruprecht, Romina - 2020

This paper develops a dynamic general equilibrium model with two currencies to study the effect of negative interest rates on domestic money demand and exchange rates. Money demand for a currency depends on the relative ratio of the money market rate and the deposit rate of the central bank. If...

Persistent link: https://www.econbiz.de/10012829612

Negative interest rates, capital flows and exchange rates

Ruprecht, Romina - 2020

Persistent link: https://www.econbiz.de/10012240039

The Effects of Negative Interest Rates on Equity and Currency Markets

Lee, Seungho; Switzer, Lorne - 2022

This paper examines the effects of negative interest rate policies (NIRP) on foreign exchange and equity markets of eight European countries and Japan. NIRP announcement effects on currency depreciation are shown to be transitory. In contrast, on the day of NIRP implementation, both currency and...

Persistent link: https://www.econbiz.de/10014236107

Causal effects of countercyclical interest rates : evidence from the classical gold standard

Mitchener, Kris; Pina, Gonçalo - 2022

We estimate the causal impact of countercyclical interest rates on macroeconomic outcomes in open economies. To identify countercyclical interest rates, we construct a new database of short-term interest rates, principal exports, and international commodity prices for 40 economies from 1870 to...

Persistent link: https://www.econbiz.de/10013183777

Causal Effects of Countercyclical Interest Rates : Evidence from the Classical Gold Standard

Mitchener, Kris James; Pina, Gonçalo - 2022

Persistent link: https://www.econbiz.de/10013291318

Optimal Monetary Policy in a Currency Union with Interest Rate Spreads

Bhattarai, Saroj - 2015

We introduce "financial imperfections" -- asymmetric net wealth positions, incomplete risk-sharing, and interest rate spreads across member countries -- in a prototypical two-country currency union model and study implications for monetary policy transmission mechanism and optimal policy. In...

Persistent link: https://www.econbiz.de/10013035757

Interest Rate Rules, Exchange Market Pressure, and Successful Exchange Rate Management

Klaassen, Franc - 2016

Central banks with an exchange rate objective set the interest rate in response to what they call ''pressure.'' Instead, existing interest rate rules rely on the exchange rate minus its target. To stay closer to actual policy, we introduce a rule that uses exchange market pressure (EMP), the...

Persistent link: https://www.econbiz.de/10012993375

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