WP 22-28 – We propose that the effective lower bound on monetary policy is the reversal interest rate, below which further rate cuts reduce bank lending. Our model demonstrates that this rate exists and estimates it is roughly -1% for the Euro area.
This special report highlights ongoing work to benchmark the stance of monetary policy using a range of policy rules that are widely employed in studies of monetary economics.
Research in Focus — Monetary policy is expected to help all households in society. When households are diverse, and thus are affected by monetary policy differently, how can monetary policy help all of them?
Economic Insights — We take a closer look at the Federal Reserve's new strategy to lessen the danger of persistently low inflation.