The Stochastic Lower Bound

Revisiting the New Keynesian Policy Paradoxes under QE

“…2 Through the lenses of a tractable NK model along the lines of Sims et al (2020), we analyse both analytically and numerically if, and under what conditions, QE can resolve the puzzling results that characterise the NK framework at the ELB. We show that, if QE follows an endogenous rule reacting to deviations in 1 See, e.g., Nakov (2008), Nakata (2017), Masolo and Winant (2019), and Nakata et al (2019). 2 The effectiveness of QE and other unconventional monetary policies remains an open empirical question.…”

Revisiting the New Keynesian policy paradoxes under QE

“… See, e.g., Nakov (2008),Nakata (2017),Masolo andWinant (2019), andNakata et al (2019).2 The effectiveness of QE and other unconventional monetary policies remains an open empirical question. For example,Debortoli et al (2019) provide evidence of the efficacy of unconventional monetary policies and the "irrelevance" of the zero lower bound on the nominal policy rate, whereas, other papers (e.g.,Fabo et al, 2020 and Giansante et al, 2020) argue that the contribution of QE to boosting lending and economic activity may have been quite limited.…”

Monetary policy inertia and the paradox of flexibility

“…Other papers analysing the role of monetary policy at the ZLB include, for example,Nakov (2008),Cochrane (2017),Nakata (2017), andMasolo and Winant (2019).…”