scholarly journals The Natural Rate of Interest and Its Usefulness for Monetary Policy

2014 ◽  
Vol 104 (5) ◽  
pp. 37-43 ◽  
Author(s):  
Robert Barsky ◽  
Alejandro Justiniano ◽  
Leonardo Melosi
Keyword(s):  
United States ◽  
Monetary Policy ◽  
Lower Bound ◽  
Great Recession ◽  
State Of The Art ◽  
The United States ◽  
Natural Rate ◽  
The Great Recession ◽  
Natural Rate Of Interest ◽  
Comparable Magnitude

We estimate a state-of-the-art DSGE model to study the natural rate of interest in the United States over the last 20 years. The natural rate is highly procyclical, and fell substantially below zero in each of the last three recessions. Although the drop was of comparable magnitude across the three recessions, the decline was considerably more persistent in the Great Recession. We discuss the usefulness and limitations, particularly due to the zero lower bound, of the natural rate for the conduct of monetary policy.

scholarly journals Deleveraging and Monetary Policy: Japan Since the 1990s and the United States Since 2007

2012 ◽  
Vol 26 (3) ◽  
pp. 177-202 ◽  
Author(s):  
Kazuo Ueda
Keyword(s):  
United States ◽  
Monetary Policy ◽  
Great Recession ◽  
Federal Reserve ◽  
The United States ◽  
Federal Funds ◽  
Federal Funds Rate ◽  
The Great Recession ◽  
Policy Responses ◽  
The U.S

As the U.S. economy works through a sluggish recovery several years after the Great Recession technically came to an end in June 2009, it can only look with horror toward Japan's experience of two decades of stagnant growth since the early 1990s. In contrast to Japan, U.S. policy authorities responded to the financial crisis since 2007 more quickly. Surely, they learned from Japan's experience. I will begin by describing how Japan's economic situation unfolded in the early 1990s and offering some comparisons with how the Great Recession unfolded in the U.S. economy. I then turn to the Bank of Japan's policy responses to the crisis and again offer some comparisons to the Federal Reserve. I will discuss the use of both the conventional interest rate tool—the federal funds rate in the United States, and the “call rate” in Japan—and nonconventional measures of monetary policy and consider their effectiveness in the context of the rest of the financial system.

scholarly journals The Great Recession and Mental Health in the United States

2019 ◽  
Vol 7 (5) ◽  
pp. 900-913 ◽  
Author(s):  
Miriam K. Forbes ◽  
Robert F. Krueger
Keyword(s):  
Mental Health ◽  
United States ◽  
Great Recession ◽  
Population Level ◽  
Safety Net ◽  
The United States ◽  
Panic Attacks ◽  
The Great Recession ◽  
Additional Support ◽  
The Impact

The full scope of the impact of the Great Recession on individuals’ mental health has not been quantified to date. In this study we aimed to determine whether financial, job-related, and housing impacts experienced by individuals during the recession predicted changes in the occurrence of symptoms of depression, generalized anxiety, panic attacks, and problematic alcohol use or other substance use. Longitudinal survey data ( n = 2,530 to n = 3,293) from the national Midlife in the United States study that were collected before (2003–2004) and after (2012–2013) the Great Recession were analyzed. The population-level trend was toward improvements in mental health over time. However, for individuals, each recession impact experienced was associated with long-lasting and transdiagnostic declines in mental health. These relationships were stronger for some sociodemographic groups, which suggests the need for additional support for people who suffer marked losses during recessions and for those without a strong safety net.

scholarly journals Dynamic Debt Deleveraging and Optimal Monetary Policy

2020 ◽  
Vol 12 (2) ◽  
pp. 310-350 ◽  
Author(s):  
Pierpaolo Benigno ◽  
Gauti B. Eggertsson ◽  
Federica Romei
Keyword(s):  
Monetary Policy ◽  
Lower Bound ◽  
New Keynesian ◽  
New Keynesian Model ◽  
Optimal Monetary Policy ◽  
Natural Rate ◽  
Keynesian Model ◽  
Natural Rate Of Interest ◽  
Standard Framework

This paper proposes a postcrisis New Keynesian model that incorporates agent heterogeneity in borrowing and lending with a minimum set of assumptions. Unlike the standard framework, this model makes the natural rate of interest endogenous and dependent on macroeconomic policy. The main application is to study optimal monetary policy at the zero lower bound (ZLB). Such policy succeeds in raising the natural rate of interest by creating an environment that speeds up deleveraging and thus endogenously shortens the crisis and the duration of binding ZLB. Inflation should be front-loaded and should overshoot its long-term target during the ZLB episode. (JEL E12, E31, E32, E43, E52)

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