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

  • C.A. Ullersma
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    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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    File URL: http://www.dnb.nl/binaries/ms2001-09_tcm46-147308.pdf
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    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
    Contact details of provider: Postal: Postbus 98, 1000 AB Amsterdam
    Web page: http://www.dnb.nl/en/

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    19. Ben S. Bernanke & Mark Gertler, 1995. "Inside the Black Box: The Credit Channel of Monetary Policy Transmission," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 27-48, Fall.
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    27. Reifschneider, David & Willams, John C, 2000. "Three Lessons for Monetary Policy in a Low-Inflation Era," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 32(4), pages 936-66, November.
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