期刊名称：Euro Area Balance of Payments and International Investment Position Statistics
印刷版ISSN：1830-3420
电子版ISSN：1830-3439
出版年度：2016
出版社：European Central Bank
摘要：Modifying the objective function of a discretionary central bank to include an interest-ratesmoothing objective increases the welfare of an economy where large contractionary shocksoccasionally force the central bank to lower the policy rate to its e ective lower bound. Thecentral bank with an interest-rate smoothing objective credibly keeps the policy rate low forlonger than the central bank with the standard objective function does. Through expectations,the temporary overheating of the economy associated with such low-for-long interest rate policymitigates the declines in ination and output when the lower bound constraint is binding. Ina calibrated model, we nd that the introduction of an interest-rate smoothing objective canreduce the welfare costs associated with the lower bound constraint by more than half.
