Nominal interest rates may remain substantially below the averages of the last half century,
because central banks' inflation objectives lie below the average level of inflation, and …

This article presents a model of quantitative easing (QE) at the zero lower bound (ZLB) on
the short-term nominal interest rate. QE, which reduces the maturity of government debt, is …

Liquidity traps can be either fundamental or confidence-driven. In a simple, unified New
Keynesian framework, I provide the analytical condition for the latter's prevalence: enough …

Optimal forward guidance is the simple policy of keeping interest rates low for some
optimally determined number of periods after the liquidity trap ends and moving to normal …

We simulate the FRB/US model and a number of statistical models to quantify some of the
risks stemming from the effective lower bound (ELB) on the federal funds rate and to assess …

In an economy with an occasionally binding zero lower bound (ZLB) constraint, the
anticipation of future ZLB episodes creates a trade-off for discretionary central banks …

We examine the implications of less powerful forward guidance for optimal policy using a
sticky-price model with an effective lower bound (ELB) on nominal interest rates as well as a …

Modifying the objective function of a discretionary central bank to include an interest-rate
smoothing objective increases the welfare of an economy in which large contractionary …

The presence of the lagged shadow policy rate in the interest rate feedback rule reduces the
government spending multiplier nontrivially when the policy rate is constrained at the zero …

Structural models with no solution are incoherent, and those with multiple solutions are
incomplete. We show that models with occasionally binding constraints are not generically …