Preemptive Monetary Policy and the Zero Interest Rate Bound (in Korean)

This paper studies the necessity of preemptive monetary policy in an economy where an adverse shock is expected to occur in thenear future. To address this question, after clarifying the definition of 'preemptiveness', we solve the optimization problem. We find that a zero interest rate bound causes the central bank to conduct monetary policy preemptively. However, such preemptive action is not always needed. Although the interest rate needs to be set preemptively in a discretion solution, the interest rate in a commitment solution depends on the structural parameters of economic models, the size of adverse shocks in the near future, and the level of the inflation target.