Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129718
Authors: 
Billi, Roberto
Year of Publication: 
2015
Series/Report no.: 
Sveriges Riksbank Working Paper Series 302
Abstract: 
Many argue that, in the presence of a lower bound on nominal interest rates, central banks should use a risk management approach for setting policy, which implies commit- ting to a more expansionary policy to deal with uncertainty about the economic recovery. Using a standard model for monetary policy analysis, I study the effects of an uncertain future for both price level targeting and nominal GDP level targeting. The results clarify that, during lower bound episodes, the extent to which policy can overcome uncertainty depends crucially on the choice of policy framework.
Subjects: 
nominal level targets
optimal discretionary policy
zero lower bound
JEL: 
E31
E52
E58
Document Type: 
Working Paper

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