Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

Theoretical Analysis Regarding a Zero Lower Bound on Nominal Interest Rates

Bennett T. McCallum
Journal of Money, Credit and Banking
Vol. 32, No. 4, Part 2: Monetary Policy in a Low-Inflation Environment (Nov., 2000), pp. 870-904
DOI: 10.2307/2601148
Stable URL: http://www.jstor.org/stable/2601148
Page Count: 35
  • Subscribe ($19.50)
  • Cite this Item
Theoretical Analysis Regarding a Zero Lower Bound on Nominal Interest Rates
Preview not available

Abstract

This paper explores several issues concerning a possible zero lower bound (ZLB) including its theoretical rationale; the magnitude of effects of low sustained inflation on real interest rates; the validity of analyzing monetary policy in models with no monetary variables; and the dynamic stabilizing properties of Taylor rules in a ZLB context. The most important argument, however, is that if the short nominal rate is immobilized at zero, there nevertheless exists a route for monetary stabilization policy to be effective-via the foreign exchange market. Its quantitative importance is examined in a calibrated, optimizing, open-economy model.

Page Thumbnails

  • Thumbnail: Page 
[870]
    [870]
  • Thumbnail: Page 
871
    871
  • Thumbnail: Page 
872
    872
  • Thumbnail: Page 
873
    873
  • Thumbnail: Page 
874
    874
  • Thumbnail: Page 
875
    875
  • Thumbnail: Page 
876
    876
  • Thumbnail: Page 
877
    877
  • Thumbnail: Page 
878
    878
  • Thumbnail: Page 
879
    879
  • Thumbnail: Page 
880
    880
  • Thumbnail: Page 
881
    881
  • Thumbnail: Page 
882
    882
  • Thumbnail: Page 
883
    883
  • Thumbnail: Page 
884
    884
  • Thumbnail: Page 
885
    885
  • Thumbnail: Page 
886
    886
  • Thumbnail: Page 
887
    887
  • Thumbnail: Page 
888
    888
  • Thumbnail: Page 
889
    889
  • Thumbnail: Page 
890
    890
  • Thumbnail: Page 
891
    891
  • Thumbnail: Page 
892
    892
  • Thumbnail: Page 
[893]
    [893]
  • Thumbnail: Page 
894
    894
  • Thumbnail: Page 
[895]
    [895]
  • Thumbnail: Page 
896
    896
  • Thumbnail: Page 
897
    897
  • Thumbnail: Page 
898
    898
  • Thumbnail: Page 
899
    899
  • Thumbnail: Page 
900
    900
  • Thumbnail: Page 
901
    901
  • Thumbnail: Page 
902
    902
  • Thumbnail: Page 
903
    903
  • Thumbnail: Page 
904
    904