Issues Regarding the Use of the Policy Rate Tool
Abstract: We review two nonstandard uses of the policy rate tool, which provide additional stimulus when interest rates are close to or at the effective lower bound—forward guidance and negative interest rate policy. In particular, we survey the use of these tools since the star otf the Great Recession, review evidence of their effectiveness, and discuss key considerations that confront monetary policymakers while using them.
File(s): File format is application/pdf https://www.federalreserve.gov/econres/feds/files/2020070pap.pdf
Part of Series: Finance and Economics Discussion Series
Publication Date: 2020-08-27