Optimal Forward Guidance

Détails

ID Serval
serval:BIB_67BAC1D775B3
Type
Article: article d'un périodique ou d'un magazine.
Collection
Publications
Institution
Titre
Optimal Forward Guidance
Périodique
American Economic Journal: Macroeconomics
Auteur⸱e⸱s
Bilbiie  F.O.
Statut éditorial
In Press
Peer-reviewed
Oui
Langue
anglais
Résumé
Optimal forward guidance is the simple policy of keeping interest rates low for some optimally-determined number of periods after the liquidity trap ends and moving to normal-times optimal policy thereafter. I solve for the optimal duration in closed form in a new-Keynesian model and show that it is close to fully-optimal Ramsey policy. The simple rule "announce a duration of half of the trapís duration times the disruption" is a good approximation, including in a medium-scale DSGE model. By anchoring expectations of delphic agents (who mistake commitment for bad news), the simple rule is also often welfare-preferable to odyssean commitment.
Création de la notice
03/04/2019 10:33
Dernière modification de la notice
21/08/2019 5:16
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