Journal of money credit and banking· 2016Q1
Measuring the Macroeconomic Impact of Monetary Policy at the Zero Lower Bound
- 1,839citations
- Q1SCImago
- 2016year
Short summary
A new tractable nonlinear term structure model accurately describes economic data and quantifies the impact of unconventional monetary policy near the zero lower bound.
AI-generated from the title and abstract; the full text is not read.
Key points
- Developed a highly tractable nonlinear term structure model for zero lower bound analysis.
- Model offers an excellent description of economic data compared to benchmarks.
- Estimates show Federal Reserve stimulus lowered unemployment by 1% by December 2013.
- Stimulus impact exceeded historical Fed behavior by 0.13%.
AI-generated from the title and abstract; the full text is not read.
Abstract
This paper employs an approximation that makes a nonlinear term structure model extremely tractable for analysis of an economy operating near the zero lower bound for interest rates. We show that such a model offers an excellent description of the data compared to the benchmark model and can be used to summarize the macroeconomic effects of unconventional monetary policy. Our estimates imply that the efforts by the Federal Reserve to stimulate the economy since July 2009 succeeded in making the unemployment rate in December 2013 1% lower, which is 0.13% more compared to the historical behavior of the Fed.
The authors' abstract, as published at the source. Journal of money credit and banking, 2016 · DOI ↗
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Field: General Economics, Econometrics and Finance
General Economics, Econometrics and FinanceEconomics, Econometrics and Finance