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Fiscal multipliers and the choice of zero lower bound modeling

Siemsen, Thomas; Watzka, Sebastian - 2013

In this note we elaborate on the effect of the modeling choice of the zero lower bound on the size of the fiscal multiplier. To this end we contrast two different ways to implement the ZLB in a New Keynesian model: the ZLB modeled as an endogenous central bank reaction to a contractionary demand...

Persistent link: https://www.econbiz.de/10009772911

Monetary policy interactions : the policy rate, asset purchases, and optimal policy with an interest rate peg

Gödl-Hanisch, Isabel; Mau, Ronald; Rawls, Jonathan - 2023

a fixed policy rate. This policy induces similar welfare losses relative to dual-instrument policy as inflation …

Persistent link: https://www.econbiz.de/10014252576

Unconventional fiscal policy, inflation expectations, and consumption expenditure

D'Acunto, Francesco; Hoang, Daniel; Weber, Michael - 2016

study the causal effect of unconventional fiscal policies on consumption expenditure via the inflation-expectations channel … (VAT) effective in 2007. This shock increased German households' inflation expectations during 2006, as well as actual … inflation in 2007. Matched households in other European countries serve as counterfactuals in a difference …

Persistent link: https://www.econbiz.de/10011436147

Managing households' expectations with salient economic policies

D'Acunto, Francesco; Hoang, Daniel; Weber, Michael - 2019 - This version: August 2019

consumption via managing inflation expectations based on the Euler equation. Unconventional fiscal policy uses trivial … announcements of future consumer-price increases to boost inflation expectations and consumption expenditure on impact. Instead … inflation expectations and spending today. We find households' inflation expectations and readiness to spend react substantially …

Persistent link: https://www.econbiz.de/10012057290

Inequality and the zero lower bound

Fernández-Villaverde, Jesús; Marbet, Joël; Nuño, Galo; … - 2023

combine low inflation targets and high levels of wealth inequality. …

Persistent link: https://www.econbiz.de/10014288300

Are there differences in the effectiveness of quantitative easing at the zero-lower-bound in Japan over time?

Michaelis, Henrike; Watzka, Sebastian - 2014

Using a time-varying parameter vector autoregression (TVP-VAR) with a new sign restriction framework, we study the changing effectiveness of the Bank of Japan's Quantitative Easing policies over time. We analyse the Zero-Interest Rate Policy from 1999 to 2000, the Quantitative Easing Policy from...

Persistent link: https://www.econbiz.de/10010383204

How banks respond to negative interest rates : evidence from the Swiss exemption threshold

Basten, Christoph; Mariathasan, Mike - 2018

We analyze the effect of negative monetary policy rates on banks, using detailed supervisory information from Switzerland. For identification, we compare changes in the behavior of banks that had different fractions of their central bank reserves exempt from negative rates. More affected banks...

Persistent link: https://www.econbiz.de/10011795014

Mixing QE and interest rate policies at the effective lower bound : micro evidence from the euro area

Bittner, Christian; Rodnyansky, Alexander; Saidi, Farzad; … - 2021 - First version: June 15, 2021, this version: October 12, 2021

In the presence of negative monetary-policy rates and a zero lower bound on deposit rates, banks that are more exposed to central banks' asset-purchase programs reduce their lending to the real economy by more than their counterparts. When banks face a lower bound on customer deposit rates, an...

Persistent link: https://www.econbiz.de/10012649768

Forward guidance contracts

Gersbach, Hans; Hahn, Volker; Liu, Yulin - 2015 - This version: May 2015

We examine "Forward Guidance Contracts", which make central bankers' utility contingent on the precision of interest-rate forecasts for some time. Such Forward Guidance Contracts are a exible commitment device and can improve economic performance when the economy is stuck in a liquidity trap....

Persistent link: https://www.econbiz.de/10010528970

Forward guidance in a simple model with a zero lower bound

Illing, Gerhard; Siemsen, Thomas - 2014 - First Version: December 2013

In this paper we present a three period setup to model central bank forward guidance in a liquidity trap. We analyze the role of long-run and short-run price stickiness under discretion and commitment in a straightforward and intuitive way. Despite the impact of price rigidity on welfare being...

Persistent link: https://www.econbiz.de/10010257354