policy rate is negative. When a negative interest rate policy (NIRP) is deployed in concert with rate forward guidance (FG …

forward guidance policy makes large front-loaded promises to stabilize expectations. Policy is too stimulatory in the event of … calendar-based forward guidance, independent of the shock’s realised persistence. The insurance property distinguishes our … paper from other bounded rationality papers that solve the forward guidance puzzle and generates important quantitative …

. Unconventional monetary policies, such as forward guidance, are weaker. In liquidity traps, the government spending output multiplier …