monetary-policy
Log in to follow5 published entries by 1 member, in Monetary Policy Rules and the Policy Stance, Unconventional Monetary Policy
Lessons and open questions
What the toolkit can deliver, its side effects, the argument that it stayed on too long after 2021, how the frameworks changed, and an exercise on balance sheet data.
The effective lower bound
Why the policy rate cannot fall much below zero, why that matters more when the natural rate is low, and what a liquidity trap does to the usual policy logic.
Rules in practice: Fed, ECB and SNB
How three central banks describe their own frameworks, how they use rules without following them, and how to compute a prescription yourself.
The Taylor rule
Taylor's 1993 formula, what each term means, and why a simple rule described Fed policy so well.
Why rules? Time inconsistency and the case for commitment
Why a central bank that is free to do the best thing each period can end up with higher inflation and nothing to show for it.