Keen, Benjamin D.; Richter, Alexander W.; Throckmorton, … - 2016 - This draft: May 19, 2016
forward guidance depends on the state of the economy, the speed of the recovery, the ZLB constraint, the degree of uncertainty … stimulus from forward guidance falls as the economy deteriorates or as households expect a slower recovery. When the ZLB binds …, less uncertainty about the economy or an expectation of a stronger response to inflation reduces the benefit of forward …