Speed limit policy and liquidity traps

Arbeitspapier

The zero lower bound (ZLB) constraint on interest rates makes speed limit policies (SLPs) - policies aimed at stabilizing output growth - less effective. Away from the ZLB, the history dependence induced by a concern for output growth stabilization improves the inflation-output tradeoff for a discretionary central bank. However, in the aftermath of a deep recession with a binding ZLB, a central bank with an objective for output growth stabilization aims to engineer a more gradual increase in output than under the standard discretionary policy. The anticipation of a more restrained recovery exacerbates the declines in inflation and output when the lower bound is binding.

Angaben zum Objekt

• ISBN: 978-92-899-3297-4
• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: ECB Working Paper ; No. 2192

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Monetary Policy ; Policy Objectives; Policy Designs and Consistency; Policy Coordination
• Thema: Liquidity Traps ; Markov-Perfect Equilibrium ; Speed Limit Policy ; Zero Lower Bound

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Nakata, Taisuke ; Schmidt, Sebastian ; Yoo, Paul
• Ereignis: Veröffentlichung
• (wer): European Central Bank (ECB)
• (wo): Frankfurt a. M.
• (wann): 2018

Weitere Informationen

• DOI: doi:10.2866/47035
• Handle: http://hdl.handle.net/10419/208226
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ