The recent literature on monetary policy in the presence of a zero lower bound on interest rates has shown that forward guidance regarding the path of interest rates can be very effective in preserving macroeconomic stability in the face of a contractionary demand shock; moreover, that...

This paper views the policy response to the recent financial crisis from the perspective of Milton Friedman's monetary economics. Five major aspects of the policy response were: 1) discount window lending was provided broadly to the financial system, at rates that were low in relation to the...

This study analyzes the interest rate pass-through (IRPT) from money market rates to various loan rates for up to 12 countries of the European Monetary Union (EMU) between 2003 and 2011 based on fully harmonized data. We first test for a cointegrating relationship between loan rates and the Euro...

We propose an alternative way of estimating Taylor reaction functions if the zero‐lower bound on nominal interest rates is binding. This approach relies on tackling the real rather than the nominal interest rate. So if the nominal rate is (close to) zero central banks can influence the...

A long-standing area of research and policy interest has been the construction of a measure of monetary policy stance. One measure that has been proposed—as an alternative to indices that employ monetary aggregates or exchange rates—is the spread between the actual real interest rate and its...

This study puts the monetary transmission process in the eurozone between 2003 and 2011 under closer scrutiny. For this purpose, we investigate the interest rate pass-through from money market to various loan rates for up to twelve countries of the European Monetary Union. Applying different...

We propose an alternative way of estimating Taylor reaction functions if the zero-lower-bound on nominal interest rates is binding. This approach relies on tackling the real rather than the nominal interest rate. So if the nominal rate is (close to) zero central banks can influence the inflation...

Seit Ausbruch der Finanzkrise haben Zentralbanken weltweit versucht, dem wirtschaftlichen Abschwung mit zum Teil unkonventionellen Maßnahmen entgegenzuwirken. Dieser Beitrag fasst einerseits die Maßnahmen der EZB zusammen und zeigt dabei auf, dass die EZB weniger unkonventionell als andere...

The current financial crisis is often said to be caused by excessive liquidity and distorted incentives in the US subprime real estate sector. Taking this as a starting point, this paper analyzes the relation between house prices and credit respectively money growth between 1992 and 2006 (West...

We provide empirical estimates of the effect of large-scale asset purchase (LSAP)-style operations on longer-term U.S. Treasury yields within a framework that nests the alternative theoretical perspectives on LSAPs. As the principal channels through which LSAPs migh tmatter for longer-term...