The Zero Interest Rate Floor (ZIF) and its Implications for Monetary Policy in Japan-Reference-Cited by-同舟云学术

The Zero Interest Rate Floor (ZIF) and its Implications for Monetary Policy in Japan

Published:2004-01 Issue: Volume:187 Page:76-92
ISSN:0027-9501
Container-title:National Institute Economic Review
language:en
Short-container-title:Natl. Inst. econ. rev.

Author:

Hunt Benjamin,Laxton Douglas

Abstract

This paper uses the IMF's macroeconomic model MULTIMOD to examine the implications of the zero interest rate floor (ZIF) for the design of monetary policy in Japan. Similar to findings in other studies, targeting rates of inflation lower than 2.0 per cent significantly increases the likelihood of the ZIF becoming binding. Systematic monetary policy strategies that respond strongly to stabilise output and inflation, or that incorporate some explicit price-level component, can help to mitigate the implications of the ZIF.

Publisher

Cambridge University Press (CUP)

Subject

General Economics, Econometrics and Finance

Link

http://journals.sagepub.com/doi/pdf/10.1177/00279501041871007

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