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The Zero Lower Bound on Nominal Interest Rates and Monetary Policy Effectiveness: a Survey

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Author Info
C.A. Ullersma
Abstract

This paper surveys the literature on monetary policy at the zero lower bound on nominal interest rates. Certain crucial insights regarding expectations have been neglected in recent research in this field. Taking this into account, the interactions between demand and supply shocks appear crucial for hitting the zero lower bound and escaping form it. Restoring confidence can play a vital role in solving the zero lower bound problem, thereby avoiding a liquidity trap.

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Publisher Info
Paper provided by Netherlands Central Bank, Monetary and Economic Policy Department in its series MEB Series (discontinued) with number 2001-9.

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Date of creation: Oct 2001
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Handle: RePEc:dnb:mebser:2001-9

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Related research
Keywords: Monetary policy; Zero lower bound; Liquidity trap;

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Find related papers by JEL classification:
E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics

References listed on IDEAS
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