Zero lower bound and monetary policy in the euro area : optimal monetary policy in a low inflation environment
Monetary policy sähkökirjat Business BUSINESS & ECONOMICS
Diplomica Verlag
2008
EISBN 9783836614900
Zero Lower Bound andMonetary Policy in the Euro AreaOptimal Monetary Policy in aLow Inflation Environment; Table of contents; 1. Introduction; 2. Literature; 3. The Model; 4. Modelling the euro area economy; 5. How severe is the zero bound in the euro area?; 6. Discussion; 7. Conclusions; Appendix; Literature.
Central banks around the world try to influence economic activity by altering nominal interest rates which will have an effect on the real rate. However, this is only possible as long as interest rates are above zero. The case of Japan showed that monetary policy was helpless as nominal rates approached zero. This Book starts with an overview of monetary policy with the restriction that interest rates can not fall below zero. Then optimal monetary policy in a low inflation environment is treated. This is done by using a New Keynesian model with sticky prices. Therefore the model and the necess.
Central banks around the world try to influence economic activity by altering nominal interest rates which will have an effect on the real rate. However, this is only possible as long as interest rates are above zero. The case of Japan showed that monetary policy was helpless as nominal rates approached zero. This Book starts with an overview of monetary policy with the restriction that interest rates can not fall below zero. Then optimal monetary policy in a low inflation environment is treated. This is done by using a New Keynesian model with sticky prices. Therefore the model and the necess.
