Threshold-based forward guidance can work at the zero lower bound, BoE paper says
Bank of England working paper documents success of threshold-based forward guidance
Threshold-based forward guidance (TBFG) can improve outcomes at the zero lower bound as a "lower-for-longer" policy, a Bank of England (BoE) working paper has found.
Threshold-based forward guidance: hedging the zero lower bound, by Lena Boneva, Richard Harrison and Matt Waldron, uses a New Keynesian model to see if TBFG can be used temporarily at the zero lower bound to stimulate the economy without creating time inconsistency.
The authors note that TBFG can be successful if the policy-maker
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@centralbanking.com or view our subscription options here: http://subscriptions.centralbanking.com/subscribe
You are currently unable to print this content. Please contact info@centralbanking.com to find out more.
You are currently unable to copy this content. Please contact info@centralbanking.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@centralbanking.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@centralbanking.com
Most read
- BIS’s Zhang Tao on why Asian central banks favour a broader policy mix
- Central banks prepare for the rise of AI
- Central bank of the year: Central Bank of Brazil