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Expectations Formation and the Effectiveness of Strategies for Limiting the Consequences of the Zero Bound on Interest Rates
Reifschneider, David; Roberts, John M. - 2006
We use simulations of the Federal Reserve's FRB/US model to examine the efficacy of a number of proposals for reducing the consequences of the zero bound on nominal interest rates. Among the proposals are: a more aggressive monetary policy; promises to make up any shortfall in monetary ease...
Persistent link: https://www.econbiz.de/10014060193
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Japan's liquidity trap
Akram, Tanweer - 2016
Japan has experienced stagnation, deflation, and low interest rates for decades. It is caught in a liquidity trap. This paper examines Japan’s liquidity trap in light of the structure and performance of the country’s economy since the onset of stagnation. It also analyzes the country’s...
Persistent link: https://www.econbiz.de/10011453035
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Monetary policy disconnect
Ballensiefen, Benedikt; Ranaldo, Angelo; Winterberg, Hannah - 2020 - This version: December 11, 2020
Although designed to support monetary policy, two crucial aspects of the central bank framework can disconnect the monetary policy transmission: banks' access to central bank deposits and Quantitative Easing (QE). We show how both hinder the monetary policy transmission through the main...
Persistent link: https://www.econbiz.de/10012387237
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Monetary policy transmission to mortgages in a negative interest rate environment
Amzallag, Adrien; Calza, Alessandro; Georgarakos, Dimitris - 2019
Do negative policy rates hinder banks' transmission of monetary policy? To answer this question, we examine the behaviour of Italian mortgage lenders using a novel loan-level dataset. When policy rates turn negative, banks with higher ratios of retail overnight deposits to total assets charge...
Persistent link: https://www.econbiz.de/10011975610
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Non-Ricardian borrowers and mortgage type : implications for monetary policy leaning against the wind
Pietrzak, Marcin - In: Journal of central banking theory and practice 13 (2024) 2, pp. 153-185
inflation targeting. This way the central bank tries to address excessive household debt. While the merits of such policy have … freely adjust outstanding debt (refinancing) and (ii) dominant mortgage type in the economy (fixed or adjustable rate). I … significantly depends on the ability to adjust debt and on mortgage type. Policy prescriptions based on models not accounting for …
Persistent link: https://www.econbiz.de/10014581561
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Monetary policy and long-term interest rates
Amisano, Gianni; Tristani, Oreste - In: Quantitative economics : QE ; journal of the … 14 (2023) 2, pp. 689-716
We study the relationship between monetary policy and long‐term rates in a structural, general equilibrium model estimated on both macro‐ and yield‐data from the United States. Regime shifts in the conditional variance of productivity shocks, or "uncertainty shocks," are a crucial driver...
Persistent link: https://www.econbiz.de/10014308589
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The relationship between the federal funds rate and the Fed's federal funds rate target : is it open market or open mouth operations?
Thornton, Daniel L. - 2000
It is widely believed that the Fed controls the funds rate by altering the degree of pressure in the reserve market through open market operations when it changes its target for the federal funds rate. Recently, however, several economists have suggested that open market operations may not be...
Persistent link: https://www.econbiz.de/10011418890
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The neutral rate of interest in Canada
Mendes, Rhys R. - 2014
A measure of the neutral policy interest rate can be used to gauge the stance of monetary policy. We define the neutral rate as the real policy rate consistent with output at its potential level and inflation equal to target after the effects of all cyclical shocks have dissipated. This is a...
Persistent link: https://www.econbiz.de/10010406295
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The Identification of the Response of Interest Rates to Monetary Policy Actions Using Market-Based Measures of Monetary Policy Shocks
Thornton, Daniel L. - 2012
It has become common practice to estimate the response of asset prices to monetary policy actions using market-based measures such as the unexpected change in the federal funds futures rate as proxies for monetary policy shocks. I show that because interest rates and market-based measures of...
Persistent link: https://www.econbiz.de/10013116855
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Pegging the Interest Rate on Bank Reserves
Diba, Behzad - 2017
We develop a model of monetary policy with a small departure from the basic New Keynesian (NK) model. In this model, the central bank can set the interest rate on bank reserves and the nominal stock of bank reserves independently, because these reserves reduce the costs of banking (i.e., have a...
Persistent link: https://www.econbiz.de/10012962958