Forward Guidance as a Monetary Policy Rule
Additional contact information
Mitsuru Katagiri: Bank of Japan
No 16-E-6, Bank of Japan Working Paper Series from Bank of Japan
Many central banks implement forward guidance according to an implicit or explicit policy rule in practice, and thus it is expected to influence the economy by changing expectations formation of private agents. In this paper, I investigate the effects of forward guidance particularly via expectations formation by formulating forward guidance as a monetary policy rule in a non-linear new Keynesian model. A quantitative analysis using the U.S. and Japanese data implies that a rule-based forward guidance significantly mitigates a decline in inflation and output growth in a crisis period via changing expectations formation.
Keywords: Forward Guidance; Expectations Formation; Effective Lower Bound; Particle Filter (search for similar items in EconPapers)
JEL-codes: E31 E32 E42 E52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-ger, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:boj:bojwps:wp16e06
Access Statistics for this paper
More papers in Bank of Japan Working Paper Series from Bank of Japan Contact information at EDIRC.
Series data maintained by Bank of Japan ().