Forward guidance and "lower for longer": The case of the ECB

  • A number of contributions to research on monetary policy have suggested that policy should be asymmetric near the lower bound on nominal interest rates. As inflation and economic activity decline, policy should ease more aggressively than it would in the absence of the lower bound. As activity recovers and inflation picks up, the central bank should act to keep interest rates lower for longer than without the bound. In this note, we investigate to what extent the policy easing implemented by the ECB since summer 2013 mirrors the rate recommendations of a simple policy rule or deviates from it in a way that indicates a “lower for longer” approach to policy near zero interest rates.

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Metadaten
Author:Tilman Bletzinger, Volker WielandORCiDGND
URN:urn:nbn:de:hebis:30:3-395780
URL:http://www.imfs-frankfurt.de/fileadmin/user_upload/IMFS_WP/WP_102.pdf
Parent Title (English):Working paper series / Institute for Monetary and Financial Stability ; 102
Series (Serial Number):Working Paper Series : Institute for Monetary and Financial Stability (102)
Publisher:Johann Wolfgang Goethe-Univ., Inst. for Monetary and Financial Stability
Place of publication:Frankfurt am Main
Document Type:Working Paper
Language:English
Year of Completion:2016
Year of first Publication:2016
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2016/04/05
Tag:European Central Bank; forward guidance; interest rates; monetary policy; zero lower bound
Issue:February 10, 2016
Page Number:32
HeBIS-PPN:381122077
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Wissenschaftliche Zentren und koordinierte Programme / Institute for Monetary and Financial Stability (IMFS)
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):License LogoDeutsches Urheberrecht