This paper reviews alternative options for monetary policy when the short-term interest rate is at the zero lower bound and develops new empirical estimates of the effects of the maturity structure of publicly held debt on the term structure of interest rates. We use a model of risk-averse...

This paper deals with Russia's monetary policy in 2014. The key developments in Russia's monetary policy in 2014 were determined by adverse processes in the Russian economy, which related to the tense geopolitical situation, massive capital outflow and the decline in the price of energy resources

The increasing importance of commercial banks' noninterest-earning activities rendered conventional monetary policy relatively obsolete in the contemporary economy. It has been a long time since commercial banking was limited to bank lending activities. Indeed, it is now present in practically...

We document a large return drift around monetary policy announcements by the Federal Open Market Committee. Stock returns start drifting up 25 days before expansionary monetary policy surprises, whereas they decrease before contractionary surprises. The cumulative return difference across...

In this paper, we provide evidence on the response of stock market returns to monetary policy shocks but condition the analysis on both the direction of monetary policy surprises and business conditions. We follow a two-step approach: First, we use an structural vector autoregressive (SVAR)...

We show that firm liability structure and associated cash flow matter for firm behavior, and that financial market participants price stocks accordingly. Looking at firm level stock price changes around monetary policy announcements, we find that firms that have more cash flow exposure see their...

Standard dynamic stochastic general equilibrium (DSGE) models assume a Taylor rule and forecast an increase in interest rates immediately after the 2007-2009 economic recession given the predicted output and inflation, contradictory to the extended period of near-zero interest rate policy (ZIRP)...

This paper investigates the identification, the determinacy and the stability of ad hoc, "quasi-optimal" and optimal policy rules augmented with financial stability indicators (such as asset prices deviations from their fundamental values) and minimizing the volatility of the policy interest...

This paper evaluates the macroeconomic effects of purchases of long-term sovereign bonds by a central bank in a monetary union when (1) the private sector faces tight financial conditions and (2) the zero lower bound (ZLB) on the policy rate holds. To this end, we calibrate a dynamic general...

Since the early 1990's, and until the 2008 financial crisis, the main policy tool of the FOMC has been a nominal interest rate target. This paper surveys an extensive literature that studies the link between monetary policy and the dynamics of bond yields. This literature uses ‘high-frequency'...