Monetary Policy When the Zero Lower Bound Is Within Reach: A Smooth Transition Regression Approach

Andreas Steiner

doi:10.1017/S1365100518000718

Monetary Policy When the Zero Lower Bound Is Within Reach: A Smooth Transition Regression Approach

Andreas Steiner^*

^*Corresponding author for this work

Global Economics & Management

Research output: Contribution to journal › Article › Academic › peer-review

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Abstract

The period of low interest rates since the global financial crisis provides a unique opportunity to examine monetary policy reaction functions near the zero lower bound (ZLB). Using smooth transition regressions for the Euro area and a panel of industrialized countries we show that central banks anticipate the ZLB by less aggressive policies in its vicinity while we do not find a significant difference between both regimes for the US.

Original language	English
Pages (from-to)	201-212
Number of pages	12
Journal	Macroeconomic Dynamics
Volume	25
Issue number	1
Early online date	20-Mar-2019
DOIs	https://doi.org/10.1017/S1365100518000718
Publication status	Published - Jan-2021

Keywords

Monetary Policy
Zero Lower Bound
Interest Rate Reaction Functions
Smooth Transition Regression Model

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10.1017/S1365100518000718

monetary policy when the zero lower bound is within reachFinal publisher's version, 133 KBLicence: Taverne

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abstract = "The period of low interest rates since the global financial crisis provides a unique opportunity to examine monetary policy reaction functions near the zero lower bound (ZLB). Using smooth transition regressions for the Euro area and a panel of industrialized countries we show that central banks anticipate the ZLB by less aggressive policies in its vicinity while we do not find a significant difference between both regimes for the US.",

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AB - The period of low interest rates since the global financial crisis provides a unique opportunity to examine monetary policy reaction functions near the zero lower bound (ZLB). Using smooth transition regressions for the Euro area and a panel of industrialized countries we show that central banks anticipate the ZLB by less aggressive policies in its vicinity while we do not find a significant difference between both regimes for the US.

KW - Monetary Policy

KW - Zero Lower Bound

KW - Interest Rate Reaction Functions

KW - Smooth Transition Regression Model

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M3 - Article

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Monetary Policy When the Zero Lower Bound Is Within Reach: A Smooth Transition Regression Approach

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Keywords

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