Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/180260
Authors: 
Reis, Ricardo
Year of Publication: 
2018
Series/Report no.: 
CESifo Working Paper No. 6998
Abstract: 
Central banks have sometimes turned their attention to long-term interest rates as a target or as a diagnosis of policy. This paper describes two historical episodes when this happened - the US in 1942-51 and the UK in the 1960s - and uses a model of inflation dynamics to evaluate monetary policies that rely on going long. It concludes that these policies for the most part fail to keep inflation under control. A complementary methodological contribution is to re-state the classic problem of monetary policy through interest-rate rules in a continuous-time setting where shocks follow diffusions in order to integrate the endogenous determination of inflation and the term structure of interest rates.
Subjects: 
Taylor rule
yield curve
pegs
ceilings
affine models
JEL: 
E31
E52
E58
Document Type: 
Working Paper

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