Arbeitspapier

Gradualism and liquidity traps

zu Verbundenen Objekten

Modifying the objective function of a discretionary central bank to include an interest-rate smoothing objective increases the welfare of an economy where large contractionary shocks occasionally force the central bank to lower the policy rate to its effective lower bound. The central bank with an interest-rate smoothing objective credibly keeps the policy rate low for longer than the central bank with the standard objective function does. Through expectations, the temporary overheating of the economy associated with such low-for-long interest rate policy mitigates the declines in inflation and output when the lower bound constraint is binding. In a calibrated model, we find that the introduction of an interest-rate smoothing objective can reduce the welfare costs associated with the lower bound constraint by more than half.

ISBN
978-92-899-2224-1
Sprache
Englisch

Erschienen in
Series: ECB Working Paper ; No. 1976

Klassifikation
Wirtschaft
Monetary Policy
Policy Objectives; Policy Designs and Consistency; Policy Coordination
Thema
gradualism
inflation targeting
interest-rate smoothing
liquidity traps
zero lower bound

Ereignis
Geistige Schöpfung
(wer)
Nakata, Taisuke
Schmidt, Sebastian
Ereignis
Veröffentlichung
(wer)
European Central Bank (ECB)
(wo)
Frankfurt a. M.
(wann)
2016

DOI
doi:10.2866/715461
Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
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Objekttyp

  • Arbeitspapier

Beteiligte

  • Nakata, Taisuke
  • Schmidt, Sebastian
  • European Central Bank (ECB)

Entstanden

  • 2016

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Stiftung des Schmidt Sebastian aus Ebersbach für die Kirche in Neunkirchen am Brand

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Decanvs @[Decanus] Facultatis Theologicae In Alma Argentoratensium Universitate Sebastianus Schmidt, S. Theologiae Doctor, Professor Ordinarivs Et Ecclesiastes. Lecturis to plērusthai en tō ta panta en pasi plērumenō

Monografie

Decanvs @[Decanus] Facultatis Theologicae In Alma Argentoratensium Universitate Sebastianus Schmidt, S. Theologiae Doctor, Professor Ordinarivs Et Ecclesiastes. Lecturis to plērusthai en tō ta panta en pasi plērumenō

Schmidt, Sebastian

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