We examine forward guidance (with known and uncertain duration) in a New Keynesian model for an advanced small open economy, showing that the response of the economy to this policy depends, both quantitatively and qualitatively, on some structural features through calibrations for Sweden and...

This paper revisits monetary-fiscal policy interactions when the policymaker has Knightian uncertainty about the exact position of the effective lower bound (ELB). We characterize optimal discretionary policy when a benevolent policymaker controls the nominal interest rate and the level of...