Forward guidance with an escape clause : when half a promise is better than a full one
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Borradores de Economía; No. 811
Date published
2014-03-03
Date
2014-03-03
Authors
Florez-Jimenez, Maria Lucia
Parra-Polanía, Julián Andrés
Parra-Polanía, Julián Andrés
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spa
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Las opiniones contenidas en el presente documento son responsabilidad exclusiva de los autores y no comprometen al Banco de la República ni a su Junta Directiva.
The opinions contained in this document are the sole responsibility of the author and do not commit Banco de la República or its Board of Directors.
Abstract
Using a three-equation New Keynesian model we find that incorporating an escape clause (EC) into Forward Guidance (FG) is welfare improving as it allows the monetary authority to avoid cases in which the cost of reduced flexibility is too high. The EC pro
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JEL Codes
E47 - Money and Interest Rates: Forecasting and Simulation: Models and Application
E58 - Central Banks and Their Policies
E52 - Monetary Policy
E58 - Central Banks and Their Policies
E52 - Monetary Policy
Temática
Keywords
Orientación hacia adelante, Comunicación del banco central, Límite inferior cero, Cláusula de escape
Keywords
Forward guidance, Escape clause, Zero lower bound, Central bank communication
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Esta obra está bajo licencia internacional Creative Commons Reconocimiento-NoComercial 4.0.
Este documento ha sido depositado por parte de el(los) autor(es) bajo la siguiente constancia de depósito