Forward Guidance Contracts

Gersbach, Hans; Hahn, Volker; Liu, Yulin

Forward Guidance Contracts

Dateien

Zu diesem Dokument gibt es keine Dateien.

Datum

2015

Autor:innen

Gersbach, Hans

Hahn, Volker

Liu, Yulin

Schriftenreihe

CESifo working paper

Sammlungen

Wirtschaftswissenschaften

Publikationstyp

Working Paper/Technical Report

Publikationsstatus

Published

Zusammenfassung

We examine “Forward Guidance Contracts”, which make central bankers’ utility contingent on the precision of interest-rate forecasts for some time. Such Forward Guidance Contracts are a exible commitment device and can improve economic performance when the economy is stuck in a liquidity trap. Utilizing the New Keynesian Framework, we establish the properties of simple renewable Forward Guidance Contracts and characterize the contracts that the government wants to offer repeatedly. These contracts create favorable tradeoffs between the efficacy of forward guidance at the zero bound and the reduced exibility in reacting to future events, when the zero bound on nominal interest rates constrains the central banks’ choice. We discuss how Forward Guidance Contracts can be used when there is uncertainty about natural real interest-rate shocks, a situation which typically calls for moderate incentive intensity. Finally we explore alternative contractual environments.

Fachgebiet (DDC)

330 Wirtschaft

Schlagwörter

orward guidance, zero lower bound, central banks, incentive contracts, transparency

Zitieren

ISO 690

GERSBACH, Hans, Volker HAHN, Yulin LIU, 2015. Forward Guidance Contracts

BibTex

@techreport{Gersbach2015Forwa-31383,
  year={2015},
  series={CESifo working paper},
  title={Forward Guidance Contracts},
  number={5375},
  url={https://ideas.repec.org/p/ces/ceswps/_5375.html},
  author={Gersbach, Hans and Hahn, Volker and Liu, Yulin}
}

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URL der Originalveröffentl.

https://ideas.repec.org/p/ces/ceswps/_5375.html

Prüfdatum der URL

2015-07-08

Universitätsbibliographie

Ja