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In Search of an Appropriate Lower Bound. The Zero Lower Bound vs. the Positive Lower Bound under Discretion and Commitment
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Piotr Ciżkowicz
Veröffentlicht/Copyright:
7. Dezember 2019
Abstract
Using a standard New Keynesian model, we show that moderate side effects of zero lower bound (ZLB) policy suffice for positive lower bound (PLB) policy to pay off in terms of welfare, especially when central banks fail to commit. For given side effects of the ZLB, as the shock that makes the ZLB bind becomes larger and more persistent, the dominance of PLB policy over ZLB policy becomes more likely. The findings hold for flexible and rigid economies with both fast and slow potential output growth and low and high inflation targets.
Keywords: zero lower bound; positive lower bound; restructuring; uncertainty; discretion; commitment
Published Online: 2019-12-07
Published in Print: 2019-12-01
© 2019 by Walter de Gruyter Berlin/Boston
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Schlagwörter für diesen Artikel
zero lower bound;
positive lower bound;
restructuring;
uncertainty;
discretion;
commitment
Artikel in diesem Heft
- Public Preferences for Government Spending Priorities: Survey Evidence from Germany
- Structural Changes in the Labor Market and the Rise of Early Retirement in France and Germany
- Tax Composition and Growth: A Broad Cross-country Perspective
- Sharing the Burden? Empirical Evidence on Corporate Tax Incidence
- Wage Performance of Immigrants in Germany
- New Evidence on the Effects of the Shortened School Duration in the German States: An Evaluation of Post-secondary Education Decisions
- Should Forecasters Use Real-Time Data to Evaluate Leading Indicator Models for GDP Prediction? German Evidence
- Worker Personality: Another Skill Bias beyond Education in the Digital Age
- Changes in Occupational Tasks and Their Association with Individual Wages and Occupational Mobility
- Is There a Glass Ceiling over Germany?
- Thoughts on a Fiscal Union in EMU
- Analyzing the Efficiency of County Road Production – Evidence from Eastern German Counties
- Interregional Migration of Human Capital and Unemployment Dynamics: Evidence from Italian Provinces
- Predatory Short Sales and Bailouts
- Coaching, Counseling, Case-Working: Do They Help the Older Unemployed Out of Benefit Receipt and Back Into the Labor Market?
- The Productivity Effects of Worker Mobility Between Heterogeneous Firms
- A Synthetic Control Assessment of the Green Paradox: The Role of Climate Action Plans
- Where Does the Good Shepherd Go? Civic Virtue and Sorting into Public Sector Employment
- Cyber Technology and the Arms Race
- Elementary Index Bias: Evidence for the Euro Area from a Large Scanner Dataset
- Conservative Politicians and Voting on Same-sex Marriage
- A Novel Housing Price Misalignment Indicator for Germany
- Epstein–Zin Utility, Asset Prices, and the Business Cycle Revisited
- Management Practices and Productivity in Germany
- Take Your Time to Grow: A Field Experiment on the Hiring of Youths
- Codetermination, Price Competition and the Network Industry
- Let the Data Speak? On the Importance of Theory-Based Instrumental Variable Estimations
- The Inherited Inequality: How Demographic Aging and Pension Reforms can Change the Intergenerational Transmission of Wealth
- Competing for Good Immigrants
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- Optimal Social Insurance and Health Inequality
- Goal Setting, Information, and Goal Revision: A Field Experiment
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- Capital adjustment cost and inconsistency in income-based dynamic panel models with fixed effects
- In Search of an Appropriate Lower Bound. The Zero Lower Bound vs. the Positive Lower Bound under Discretion and Commitment
- The Impact of Direct Cash Payments on Whole Blood Supply
- Issue Information
- Output Growth Decomposition in the Presence of Input Quality Effects: A Stochastic Frontier Approach
- Accounting for Sustainable Development over the Long-Run: Lessons from Germany
- Changes in US Monetary Policy and Its Transmission over the Last Century
- Why Did Income Inequality in Germany Not Increase Further After 2005?
- Acknowledgements
- Index