Robust Monetary Policy Under Uncertainty About the Lower Bound
Central banks face uncertainty about the true location of the effective lower bound (ELB) on nominal interest rates. We model optimal discretionary monetary policy during a liquidity trap when the central bank designs policy that is robust with respect to the location of the ELB. If the central b...
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Gepubliceerd in: | MAGKS - Joint Discussion Paper Series in Economics (Band 14-2019) |
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Hoofdauteur: | |
Formaat: | Artikel |
Taal: | Engels |
Gepubliceerd in: |
Philipps-Universität Marburg
2019
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Onderwerpen: | |
Online toegang: | PDF Full text |
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Samenvatting: | Central banks face uncertainty about the true location of the effective
lower bound (ELB) on nominal interest rates. We model optimal discretionary
monetary policy during a liquidity trap when the central bank designs policy
that is robust with respect to the location of the ELB. If the central bank
fears the worst-case location of the ELB, monetary conditions will be more
expansionary before the liquidity trap occurs. |
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Fysieke beschrijving: | 15 Seiten |
ISSN: | 1867-3678 |
DOI: | 10.17192/es2024.0609 |