Using a long-term interest rate as the monetary policy instrument

• 成果类型: Article
• 署名作者: McGough, B; Rudebusch, GD; Williams, JC
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - San Francisco; Oregon State University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2005.07.011
• 发表日期: 2005
• 页码: 855-879
• 关键词: liquidity trap; yield curve; zero bound; E-stability; indeterminacy; learning

摘要

Using a short-term interest rate as the monetary policy instrument can be problematic near its zero bound constraint. An alternative strategy is to use a long-term interest rate as the policy instrument. We find when Taylor-type policy rules are used by the central bank to set the long rate in a standard New Keynesian model, indeterminacy-that is, multiple rational expectations equilibria - may often result. However, a policy rule with a long-rate policy instrument that responds in a forward-looking fashion to inflation expectations can avoid the problem of indeterminacy. (c) 2005 Elsevier B.V. All rights reserved.