Forward guidance

• 成果类型: Article; Proceedings Paper
• 署名作者: Hagedorn, Marcus; Luo, Jinfeng; Manovskii, Iourii; Mitman, Kurt
• 署名单位: University of Oslo; University of Pennsylvania; Stockholm University; Centre for Economic Policy Research - UK; National Bureau of Economic Research
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2019.01.014
• 发表日期: 2019
• 页码: 1-23
• 关键词: Forward guidance; incomplete markets; liquidity trap

摘要

We assess the power of forward guidance promises about future interest rates as a monetary tool in a liquidity trap using a quantitative incomplete-markets model. Our results suggest the effects of forward guidance are negligible. A commitment to keep future nominal interest rates low for a few quarters although macro indicators suggest otherwise has only trivial effects on current output and employment. We explain theoretically why in complete markets models forward guidance is powerful generating a forward guidance puzzle and why this puzzle disappears in our model. We also clarify theoretically ambiguous conclusions from previous research about the effectiveness of forward guidance in incomplete and complete markets models. (C) 2019 Elsevier B.V. All rights reserved.