Exit strategies
- We study alternative scenarios for exiting the post-crisis fiscal and monetary accommodation using a macromodel where banks choose their capital structure and are subject to runs. Under a Taylor rule, the post-crisis interest rate hits the zero lower bound (ZLB) and remains there for several years. In that condition, pre-announced and fast fiscal consolidations dominate - based on output and inflation performance and bank stability - alternative strategies incorporating various degrees of gradualism and surprise. We also examine an alternative monetary strategy in which the interest rate does not reach the ZLB; the benefits from fiscal consolidation persist, but are more nuanced.
Author: | Ignazio AngeloniGND, Ester FaiaGND, Roland Winkler |
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URN: | urn:nbn:de:hebis:30:3-341788 |
URL: | http://ssrn.com/abstract=2437326 |
DOI: | https://doi.org/10.2139/ssrn.2437326 |
Parent Title (German): | SAFE working paper series ; No. 50 |
Series (Serial Number): | SAFE working paper (50) |
Publisher: | SAFE |
Place of publication: | Frankfurt am Main |
Document Type: | Working Paper |
Language: | English |
Year of Completion: | 2014 |
Year of first Publication: | 2014 |
Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
Release Date: | 2014/06/17 |
Tag: | bank runs; debt consolidation; exit strategies; monetary policy; fiscal multipliers; fiscal policy |
Issue: | This draft: April 2014 |
Page Number: | 51 |
Note: | First draft: August 2010. This draft: April 2014. |
HeBIS-PPN: | 348924917 |
Institutes: | Wirtschaftswissenschaften / Wirtschaftswissenschaften |
Wissenschaftliche Zentren und koordinierte Programme / House of Finance (HoF) | |
Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS) | |
Wissenschaftliche Zentren und koordinierte Programme / Sustainable Architecture for Finance in Europe (SAFE) | |
Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
Sammlungen: | Universitätspublikationen |
Licence (German): | ![]() |