Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/226190 
Year of Publication: 
2020
Series/Report no.: 
Discussion Paper No. 2020/19
Publisher: 
Freie Universität Berlin, School of Business & Economics, Berlin
Abstract: 
This paper empirically investigates the role of long-term inflation expectations for the monetary transmission mechanism. In contrast to earlier studies, we confirm that U.S. long-term inflation expectations respond significantly to a monetary policy shock. In line with a re-anchoring channel of monetary policy, we find that long-term inflation expectations play an important role for the transmission of monetary policy shocks to the rate of inflation. Our results are robust with respect to the identification strategy and alternative monetary policy indicators applied during the zero lower bound period.
Subjects: 
Long-Term Inflation Expectations
Monetary Policy
Structural Vector Autoregression
Sign and Zero Restrictions
JEL: 
E31
E52
C32
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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