American Economic Review Vol. 106 No. 5 2016
Monetary Policy, Financial Stability, and the Zero Lower Bound
Abstract
Much has happened in the world of central banking in the past decade. In this paper, I focus on three issues associated with the zero lower bound (ZLB) on short-term nominal interest rates and the nexus between monetary policy and financial stability: 1) whether we are moving toward a permanently lower long-run equilibrium real interest rate; 2) what steps can be taken to mitigate the constraints imposed by the ZLB; and 3) whether and how financial stability considerations should be incorporated in the conduct of monetary policy. These important topics deserve the attention of both academic and government professionals.
- DOI
- 10.1257/aer.p20161005
- Volume
- 106
- Issue
- 5
- Pages
- 39-42
- Language
- en
- Sources
- bibtex:phds-export.bib crossref openalex