We study whether the mechanism design in the central bank liquidity auctions matters for the interbank money market interest rate levels and volatility. Furthermore, we compare different mechanisms to sell liquidity in terms of revenue, efficiency and auction stage interest rate levels and...

This paper discusses the impact that a retail central bank digital currency (CBDC) could have on the implementation of monetary policy. Monetary policy implementation could be affected if the introduction of the retail CBDC changes the volume of commercial bank deposits held by customers, which...

After the global financial crisis and until 2021, the primary objective of central banks in advanced economies was to implement policies aimed at increasing inflation, given that inflation had been too low for too long. Having reached the effective lower bound (ELB) of nominal interest rates,...

We derive optimal monetary policy in a New Keynesian model with central bank asset purchases, accounting for an occasionally binding zero lower bound, ZLB, on the policy rate. Potential gains to central bank asset purchases arise with the policy rate away from the ZLB due to a constraint on the...

Against the background of the recent discussion whether the smoothing behavior of the Fed detected by empirical Taylor rules is indeed a fact or rather a statistically fiction, this paper re-examines the empirical evidence for interest rate smoothing for the case of the ECB. Based on data...

This legal contribution reflects on the changing role of central banks in the global economy by observing three interconnected developments: globalization, regionalization and the global financial crisis. The hypothesis at the outset is that these developments which are to a considerable extent...

In this paper, we examined monetary policy from August 2007, when the Fed engaged in its first unconventional action, through December 2009, when most of the Fed's special lending facilities became inactive. However, the monetary base remained in excess of $2 trillion which was more than double...

The Federal Reserve conducts monetary policy in order to achieve its statutory mandate of maximum employment, stable prices, and moderate long-term interest rates as prescribed by the Congress and laid out in the Federal Reserve Act. For many years prior to the financial crisis, the FOMC set a...

In recent years, central bank communication played an important role in monetary policy operations. In this paper, LSTVAR model is used to study the timing of central bank communications as well as the effects of central bank communications and traditional monetary policy tools under different...

This article investigates the relationship between central bank credibility and the volatility of the key monetary policy instrument. Two main contributions are brought forward. First, we propose a time-varying measure of central bank credibility based on the gap between inflation expectations...