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We study zero interest-rate policy in response to a large negative demand shock when long-run expectations can fall over time. Because falling expectations make monetary policy less effective by raising real interest rates, the optimal forward guidance policy makes large front-loaded promises to...
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's monetary policy and augment them with communication indicators. First, we find that the ECB responded to risks to price …
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policy presented in the media are affected by central bank communication and interest rate decisions …While there is ample evidence how central bank communication and interest rate decisions are perceived by financial … markets, insights regarding the response of the public is lacking. Media is known to be an important transmitter of news to …
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