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Managing monetary policy normalization

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Bibliographic Details
Authors and Corporations: Benigno, Gianluca (Author), Benigno, Pierpaolo (Author)
Other Authors: Benigno, Pierpaolo 1971- [Author]
Type of Resource: E-Book
Language: English
published:
Series: Federal Reserve Bank of New York: Staff reports ; no. 1015 (May 2022)
Subjects:
reserve management
central bank balance sheet
quantitative tightening
quantitative easing
interest on reserves
Source: Verbunddaten SWB
Lizenzfreie Online-Ressourcen
Description
Summary: We propose a new framework for monetary policy analysis to study monetary policy normalization when exiting a liquidity trap. The optimal combination of reserves and interest rate policy requires an increase in liquidity (reserves) a few quarters after the policy rate is set at the effective lower bound. Removal of accommodation requires that quantitative tightening starts before the liftoff of the policy rate. Moreover, the withdrawal of liquidity takes place at a very slow pace relative to the normalization of the policy rate.
Physical Description: 1 Online-Ressource (circa 58 Seiten); Illustrationen