Conducting Monetary Policy at Very Low Short-Term Interest Rates

# Conducting Monetary Policy at Very Low Short-Term Interest Rates > OpenAlex Metadata Hub · https://openalex.org/W1985919339 ## Bibliographic - **DOI:** 10.1257/0002828041302118 - **Year:** 2004 - **Citations:** 567 - **Open Access:** No (closed) - **License:** — - **Source:** https://doi.org/10.1257/0002828041302118 ## Authors - Ben Bernanke - Vincent Reinhart ## Abstract Can monetary policy committees, accustomed to describing their plans and actions in terms of the level of a short-term nominal interest rate, find effective means of conducting and communicating their policies when that rate is zero or close to zero? The very low levels of interest rates in Japan, Switzerland, and the United States in recent years have stimulated much interesting research on this question and have led some central banks to make changes in their operating procedures and communications strategies. In this paper, we will give a brief overview of current thinking on the conduct of monetary policy when short-term interest rates are very low or even zero. Monetary policy works for the most part by influencing the prices and yields of financial assets, which in turn affect economic decisions and thus the evolution of the economy. When the short-term policy rate is at or near zero, the conventional means of effecting monetary ease (lowering the target for the policy rate) is no longer feasible. However, it would be a mistake to think that monetary policy was impotent. We discuss three strategies for stimulating the economy at an unchanged level of the policy rate: these involve (i) providing assurance to investors that short rates will be kept lower in the future than they currently expect, (ii) changing the relative supplies of securities in the marketplace by altering the composition of the central bank’s balance sheet, and (iii) increasing the size of the central bank’s balance sheet beyond the level needed to set the short-term policy rate at zero (“quantitative easing”). We also discuss the costs and benefits of very low interest rates, an issue that bears on the question of whether the central bank should take the policy rate all the way to zero before undertaking alternative policies. ## Keywords Monetary policy, Interest rate, Economics, Mistake, Monetary economics, Balance sheet, Credit channel, Forward guidance, Macroeconomics, Inflation targeting, Finance ## Concepts - Monetary policy - Interest rate - Economics - Mistake - Monetary economics - Balance sheet - Credit channel - Forward guidance - Macroeconomics - Inflation targeting - Finance - Political science - Law --- *Metadata only — full text not imported unless Open Access license permits.*

Bài “Conducting Monetary Policy at Very Low Short-Term Interest Rates” được TradingBase chuyển thành Knowledge Product cho trader — không phải trang đọc abstract OpenAlex. Tóm lược học thuật (đã diễn giải): Can monetary policy committees, accustomed to describing their plans and actions in terms of the level of a short-term nominal interest rate, find effective means of conducting and communicating their policies when that rate is zero or close to zero? The very low levels of interest rates in Japan, Switzerland, and the United States in recent years have stimulated much interesting research on this question and have led some central banks to make changes in their operating procedures and communications strategies. In this paper, we will give a brief overview of current thinking on the conduct of monetary policy when short-term interest rates are very low or even zero. Monetary policy works for the most part by influencing the prices and yields of financial assets, which in turn affect economic decisions and thus the evolution of the economy. When the short-term policy rate is at or near ze… Phần Trading Insights bên dưới nối nghiên cứu với Forex, vàng, USD, lãi suất và risk regime — để bạn đưa vào journal và playbook. Metadata DOI/OA chỉ là rail tham chiếu; nội dung chính là summary, takeaways và ứng dụng thị trường do Content Factory sinh.