This paper presents a toolkit for generating optimal policy projections. It makes five
contributions. First, the toolkit requires a minimal set of inputs: only a baseline projection for …

We study alternative monetary policy strategies in the presence of the lower bound on
nominal interest rates and a low equilibrium real rate using an estimated DSGE model for …

We revisit the reversal puzzle: A counterintuitive contraction of inflation in response to an
interest rate peg. We show that it is intimately related to the degree of agents' anticipation. If …

The paper deals with the treatment of shocks in central banks' forecasts. Within the rational
expectations (RE) concept, which is widely used in structural macroeconomic models, the …

We study alternative monetary policy strategies in the presence of the lower bound on
nominal interest rates and a low equilibrium real rate using an estimated DSGE model for …

We estimate the effects of interest rate forward guidance (FG) using a parsimonious VAR,
augmented with survey forecast data. The identification strategy of FG shocks via sign and …

While optimal control theory in the academic study of monetary policy can be traced back at
least to the 1970s (Peterson and Lerner, 1971), it was not until 2012 that Janet Yellen—the …

Forward guidance has emerged as a crucial tool for central banks as short-term interest
rates approach the zero lower bound. While economic theory has extensively examined the …

This paper studies the effects of the ECB's large-scale bond purchases on euro area
economic activity and income inequality, in a New Keynesian model with limited asset …

We estimate the effects of interest rate forward guidance (FG) using a parsimonious VAR,
augmented with survey forecast data. The identification strategy of FG shocks via sign and …