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01404nam a2200229Ia 4500 |
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10.1016-j.jedc.2019.05.013 |
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220511s2019 CNT 000 0 und d |
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|a 01651889 (ISSN)
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| 245 |
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|a Attenuating the forward guidance puzzle: Implications for optimal monetary policy
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| 260 |
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|b Elsevier B.V.
|c 2019
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| 856 |
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|z View Fulltext in Publisher
|u https://doi.org/10.1016/j.jedc.2019.05.013
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|a We examine the implications of less powerful forward guidance for optimal policy using a sticky-price model with an effective lower bound (ELB) on nominal interest rates as well as a discounted Euler equation and a discounted Phillips curve. When the private-sector agents discount future economic conditions more in making their decisions today, a future rate cut becomes less effective in stimulating current economic activity. Under a wide range of plausible degrees of discounting, it is optimal for the central bank to compensate for the reduced effect of a future rate cut by keeping the policy rate at the ELB for longer. © 2019
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|a Discounted Euler equation
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|a Discounted Phillips curve
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|a Effective lower bound
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|a Forward guidance
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|a Optimal policy
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|a Nakata, T.
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|a Ogaki, R.
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|a Schmidt, S.
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|a Yoo, P.
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| 773 |
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|t Journal of Economic Dynamics and Control
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