Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129719
Authors: 
De Graeve, Ferre
Iversen, Jens
Year of Publication: 
2015
Series/Report no.: 
Sveriges Riksbank Working Paper Series 303
Abstract: 
Increasingly many central banks announce likely paths for future policy rates. Recent experience suggest that market forward rates can differ substantially from those announced. Models commonly adopted in policy analysis ignore such differences. This paper studies a simple model that can capture deviations between announced paths and market forward rates. We detail the macroeconomic transmission of such deviations both in the model and in the data and show how the model can inform policy deliberations.
Subjects: 
Policy path
forward rate
forward guidance
JEL: 
E43
E44
E58
Document Type: 
Working Paper

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