scholarly journals The Effectiveness of Unconventional Monetary Policy at the Zero Lower Bound: A Cross-Country Analysis

2014 ◽  
Vol 46 (4) ◽  
pp. 615-642 ◽  
Author(s):  
LEONARDO GAMBACORTA ◽  
BORIS HOFMANN ◽  
GERT PEERSMAN
Keyword(s):  
Monetary Policy ◽  
Lower Bound ◽  
Zero Lower Bound ◽  
Unconventional Monetary Policy ◽  
Country Analysis ◽  
Cross Country

Monetary Policy Spillovers across the Pacific when Interest Rates Are at the Zero Lower Bound

2016 ◽  
Vol 15 (3) ◽  
pp. 1-27 ◽  
Author(s):  
Edda Claus ◽  
Iris Claus ◽  
Leo Krippner
Keyword(s):  
Monetary Policy ◽  
Lower Bound ◽  
Interest Rates ◽  
The United States ◽  
Asset Markets ◽  
Zero Lower Bound ◽  
Unconventional Monetary Policy ◽  
Monetary Policy Shocks ◽  
Short Term ◽  
Policy Shocks

To conduct monetary policy effectively, central banks need to understand the transmission of monetary policy into financial markets. In this paper we investigate the effects of Japanese and U.S. monetary policy shocks on their own asset markets, and the spillovers into each other's markets. Because short-term nominal interest rates have been effectively zero in Japan since January 1998 and in the United States from late 2008, however, monetary policy shocks cannot be quantified by considering observable changes in short-term market interest rates. Therefore, in our analysis we use a shadow short rate―a quantitative measure of overall conventional and unconventional monetary policy that is estimated from the term structure of interest rates. Our results suggest that the operation of monetary policy at the zero lower bound of interest rates alters the transmission of shocks. In particular, we find a limited response of exchange rates during the first episode of unconventional monetary policy in Japan but a significant impact since 2006.

Optimal Monetary Policy at the Zero Lower Bound

2015 ◽  
Author(s):  
Costas Azariadis ◽  
James Bullard ◽  
Aarti Singh ◽  
Jacek Suda
Keyword(s):  
Monetary Policy ◽  
Lower Bound ◽  
Zero Lower Bound ◽  
Optimal Monetary Policy

scholarly journals Measuring the Effect of the Zero Lower Bound on Medium- and Longer-Term Interest Rates

2014 ◽  
Vol 104 (10) ◽  
pp. 3154-3185 ◽  
Author(s):  
Eric T. Swanson ◽  
John C. Williams
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Lower Bound ◽  
Private Sector ◽  
Interest Rates ◽  
Zero Lower Bound ◽  
Short Term ◽  
Macroeconomic Models ◽  
Monetary And Fiscal Policy ◽  
Effectiveness Of Monetary Policy

According to standard macroeconomic models, the zero lower bound greatly reduces the effectiveness of monetary policy and increases the efficacy of fiscal policy. However, private-sector decisions depend on the entire path of expected future short-term interest rates, not just the current short-term rate. Put differently, longer-term yields matter. We show how to measure the zero bound's effects on yields of any maturity. Indeed, 1- and 2-year Treasury yields were surprisingly unconstrained throughout 2008 to 2010, suggesting that monetary and fiscal policy were about as effective as usual during this period. Only beginning in late 2011 did these yields become more constrained. (JEL E43, E52, E62)

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