Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/204808 
Authors: 
Year of Publication: 
2019
Series/Report no.: 
MAGKS Joint Discussion Paper Series in Economics No. 14-2019
Publisher: 
Philipps-University Marburg, School of Business and Economics, Marburg
Abstract: 
Central banks face uncertainty about the true location of the effective lower bound (ELB) on nominal interest rates. We model optimal discretionary monetary policy during a liquidity trap when the central bank designs policy that is robust with respect to the location of the ELB. If the central bank fears the worst-case location of the ELB, monetary conditions will be more expansionary before the liquidity trap occurs.
Subjects: 
optimal monetary policy
discretion
robust control
uncertainty
liquidity trap
JEL: 
E31
E32
E58
Document Type: 
Working Paper

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