Forward Guidance as a Monetary Policy Tool at the Zero Lower Boundary
DOI:
https://doi.org/10.15678/ZNUEK.2015.0938.0207Keywords:
forward guidance, liquidity trap, monetary policy, communicationAbstract
Beyond the negative economic consequences it brought about, the current financial crisis has also contributed to a number of institutional changes. This evolution in the institutional framework has also appeared in monetary policy. With interest rates nearing their lower boundary, central banks have started to use unconventional monetary policy tools. One such tool is introduced in this article, which provides the theoretical background and features of forward guidance. The article contains information about the usage of forward guidance during the financial crisis. In this context, forward guidance is presented based on the experience of the Federal Reserve.Downloads
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