Global Effective Lower Bound and Unconventional Monetary Policy

Jing Cynthia Wu and Ji Zhang

No 24714, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In a standard open-economy New Keynesian model, the effective lower bound causes anomalies: output and terms of trade respond to a supply shock in the opposite direction compared to normal times. We introduce a tractable framework to accommodate for unconventional monetary policy. In our model, these anomalies disappear. We allow unconventional policy to be partially active and asymmetric between countries. Empirically, we find the US, Euro area, and UK have implemented a considerable amount of unconventional monetary policy: the US follows the historical Taylor rule, whereas the others have done less compared to normal times.

JEL-codes: E52 F00 (search for similar items in EconPapers)
Date: 2018-06
New Economics Papers: this item is included in nep-cba, nep-dge, nep-eec, nep-mac and nep-mon
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Citations: View citations in EconPapers (2)

Published as Global Effective Lower Bound and Unconventional Monetary Policy , Jing Cynthia Wu, Ji Zhang. in NBER International Seminar on Macroeconomics 2018 , Galí and West. 2019
Published as Jing Cynthia Wu & Ji Zhang, 2019. "Global effective lower bound and unconventional monetary policy," Journal of International Economics, .

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Related works:
Journal Article: Global effective lower bound and unconventional monetary policy (2019)
Working Paper: Global Effective Lower Bound and Unconventional Monetary Policy (2019)
Chapter: Global Effective Lower Bound and Unconventional Monetary Policy (2018)
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