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Journal of money credit and banking
Article . 2017 . Peer-reviewed
License: Wiley Online Library User Agreement
Data sources: Crossref
SSRN Electronic Journal
Article . 2013 . Peer-reviewed
Data sources: Crossref
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Estimating Monetary Policy Rules When Nominal Interest Rates are Stuck at Zero

Authors: Jinill Kim; Seth Pruitt;

Estimating Monetary Policy Rules When Nominal Interest Rates are Stuck at Zero

Abstract

Did the Federal Reserve's response to economic fundamentals change with the onset of the Global Financial Crisis? Estimation of a monetary policy rule to answer this question faces a censoring problem since the interest rate target has been set at the zero lower bound since late 2008. Surveys by forecasters allow us to sidestep the problem and to use conventional regressions and break tests. We find that, in the opinion of forecasters, the Fed's inflation response has decreased and the unemployment response has increased, which suggests that the Federal Reserve's commitment to stable inflation has become weaker in the eyes of the professional forecasters.

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Keywords

monetary policy, policy rule, survey data, market perceptions, censoring, zero lower bound, Blue Chip survey, monetary policy, policy rule, zero lower bound, survey data, market perceptions, censoring, Tobit, Blue Chip survey, jel: jel:E53, jel: jel:E58

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    11
    popularity
    This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
    Top 10%
    influence
    This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
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    impulse
    This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
11
Top 10%
Top 10%
Average
bronze