The Zero Interest Rate Floor (ZIF) and its Implications for Monetary Policy in Japan /

This paper uses the IMF's macroeconomic model MULTIMOD to examine the implications of the zero-interest-rate floor (ZIF) for the design of monetary policy in Japan. Similar to findings in other studies, targeting rates of inflation lower than 2.0 percent significantly increases the likelihood o...

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Bibliographic Details
Main Author: Laxton, Douglas
Other Authors: Hunt, Benjamin
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 2001.
Series:IMF Working Papers; Working Paper ; No. 2001/186
Online Access:Full text available on IMF
Description
Summary:This paper uses the IMF's macroeconomic model MULTIMOD to examine the implications of the zero-interest-rate floor (ZIF) for the design of monetary policy in Japan. Similar to findings in other studies, targeting rates of inflation lower than 2.0 percent significantly increases the likelihood of the ZIF becoming binding. Systematic monetary policy strategies that respond strongly to stabilize output and inflation, or that incorporate some explicit price-level component, can help to mitigate the implications of the ZIF.
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Physical Description:1 online resource (37 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Access:Electronic access restricted to authorized BRAC University faculty, staff and students