shock, and a credit-spread shock. We argue that only the latter can push the nominal interest rate against its zero lower … bound. Further, a recessionary shock to the net worth or the credit spread generates a positive response for loans, which is …This paper studies the effects of three financial shocks in the economy: a net-worth shock, an uncertainty or risk …

level to a temporary risk premium shock are larger and more persistent when the ZLB is binding. Our theoretical discussion …