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Monetary Policy, Financial Stability, and the Zero Lower Bound

Stanley Fischer

American Economic Review, 2016, vol. 106, issue 5, 39-42

Abstract: Much has happened in the world of central banking in the past decade. In this paper, I focus on three issues associated with the zero lower bound (ZLB) on short-term nominal interest rates and the nexus between monetary policy and financial stability: 1) whether we are moving toward a permanently lower long-run equilibrium real interest rate; 2) what steps can be taken to mitigate the constraints imposed by the ZLB; and 3) whether and how financial stability considerations should be incorporated in the conduct of monetary policy. These important topics deserve the attention of both academic and government professionals.

JEL-codes: E43 E44 E52 E58 (search for similar items in EconPapers)
Date: 2016
Note: DOI: 10.1257/aer.p20161005
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Handle: RePEc:aea:aecrev:v:106:y:2016:i:5:p:39-42