Fiscal Policy at the Zero Lower Bound

Fiscal Policy at the Zero Lower Bound - Intereconomics

This contribution argues that inertia and behavioural biases are the main impediments to a more active fiscal policy.

Unconventional Fiscal Policy at the Zero Bound

When the zero lower bound on nominal interest rates binds, monetary policy cannot provide ap- propriate stimulus. We show that in the standard New Keynesian ...

Fiscal Policy at the Zero Lower Bound without Rational Expectations

The Zero Lower Bound (ZLB) on interest rate poses a significant constraint on conventional monetary policy.1 A large literature emphasizes that fiscal policy is ...

Unconventional Fiscal Policy at the Zero Bound

When the zero lower bound on nominal interest rates binds, monetary policy cannot provide appropriate stimulus. We show that, in the standard New Keynesian ...

Fiscal and monetary stabilization policy at the zero lower bound

Highlights. •. Limited foresight reduces the power of forward guidance, but it remains useful. •. Fiscal transfers are more effective when foresight is limited.

Counter-cyclical fiscal rules and the zero lower bound

associated with the lower bound. Keywords: Fiscal Rules, Zero Lower Bound, Inflation Targeting, Deflationary Bias. JEL Classification: E31, E52, E61, E62. ECB ...

Is Stimulative Fiscal Policy More Effective at the Zero Lower Bound?

Several recent research efforts have found that stimulative fiscal policy — government spending or tax cuts — can have unusual effects when nominal interest ...

Fiscal and Monetary Stabilization Policy at the Zero Lower Bound

Fiscal and Monetary Stabilization Policy at the Zero Lower Bound: Consequences of Limited. Foresight. Michael Woodford and Yinxi Xie. NBER Working Paper No ...

Monetary Policy at the Zero Lower bound: Putting Theory into Practice

Central bankers should not assume that episodes in which short-term interest rates go to zero – the “zero lower bound” – will be infrequent or short-lived.

Fiscal Multiplier at the Zero Bound: Evidence from Japan

The United States has implemented large-scale fiscal policy measures to help households and businesses cushion the economic fallout from the ...

What Fiscal Policy Is Effective at Zero Interest Rates?

upon a large literature on optimal monetary policy at the zero bound, such as Summers (1991), ... "The Zero-Bound, Low Inflation, and Output Collapse," mimeo,.

Fiscal and monetary policy interactions in a low interest rate world

Equilibrium real interest rates have declined significantly over recent decades. As a consequence, the zero lower bound (ZLB) on policy rates ...

Unconventional fiscal and monetary policy at the zero lower bound

In essence, unconventional fiscal policy comprises measures that go beyond traditional automatic stabilisers, which tend to be too small to ...

Fiscal and Monetary Stabilization Policy at the Zero Lower Bound

We also show that a higher level of welfare is generally possible if both monetary and fiscal authorities commit themselves to history-dependent ...

Fiscal Multipliers at the Zero Lower Bound: The Role of Policy Inertia

Keywords: Fiscal Policy, Government Spending Multipliers, Interest Rate Smoothing,. Liquidity Trap, Zero Lower Bound. ∗We would like to thank Mark Gertler, ...

Fiscal Policy in a Currency Union at the Zero Lower Bound

The interaction between fiscal policies within a currency union depends on the degree of trade openness between the members of the union.

Fiscal and Monetary Stabilization Policy at the Zero Lower Bound

zero lower bound is a relevant constraint on the effectiveness of conventional monetary policy, under an assumption of bounded rationality ...

Optimal Monetary and Fiscal Policy at the Zero Lower Bound in a ...

Keywords: Optimal monetary policy; Optimal fiscal policy; Zero lower bound; Liquidity trap; Small open economy; Commitment; Discretion. ∗Preliminary. We ...

What Fiscal Policy Is Effective at Zero Interest Rates?

A key assumption is that the model is subject to shocks so that the short-term nominal interest rate is zero. This means that, in the absence of policy ...

Is Government Spending at the Zero Lower Bound Desirable?

Is Government Spending at the Zero Lower Bound Desirable? by Florin O. Bilbiie, Tommaso Monacelli and Roberto Perotti. Published in volume 11, issue 3, ...