We study zero interest-rate policy in response to a large negative demand shock when long-run expectations can fall … calendar-based forward guidance, independent of the shock’s realised persistence. The insurance property distinguishes our …

In this paper, a simple model of information asymmetry is used to study central bank forecast publication. Central … banks are assumed to choose between not publishing a forecast, publishing a forecast that conditions on current policy …, publishing an unconditional forecast, or publishing both. There is no incentive for the central bank to publish forecasts unless …

improves the out-of-sample forecast accuracy of the model. Furthermore, we evaluate the case for introducing a discount factor …