Global Effective Lower Bound and Unconventional Monetary Policy

Jing Cynthia Wu and Ji Zhang

No 47, 2019 Meeting Papers from Society for Economic Dynamics

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 nd 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.

Date: 2019
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 (9)

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Related works:
Journal Article: Global effective lower bound and unconventional monetary policy (2019)
Chapter: Global Effective Lower Bound and Unconventional Monetary Policy (2018)
Working Paper: Global Effective Lower Bound and Unconventional Monetary Policy (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed019:47

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