Redefining monetary policy rules: A threshold approach.

In this paper, we try to analyse the extent to which a redefinition of the monetary policy rule would help to avoid the zero-lower bound, as well as to explore the conditions needed to avoid that constraint. To that aim, we estimate the threshold values of the key variables of the policy rule: the i...

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Autores principales:	Carmen Diaz-Roldan, María A Prats, Maria Del Carmen Ramos-Herrera
Formato:	article
Lenguaje:	EN
Publicado:	Public Library of Science (PLoS) 2021
Materias:	Medicine R Science Q
Acceso en línea:	https://doaj.org/article/e5e9d3cabc704eb79f4db29eddd1eb02
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spelling	oai:doaj.org-article:e5e9d3cabc704eb79f4db29eddd1eb022021-12-02T20:05:27ZRedefining monetary policy rules: A threshold approach.1932-620310.1371/journal.pone.0252316https://doaj.org/article/e5e9d3cabc704eb79f4db29eddd1eb022021-01-01T00:00:00Zhttps://doi.org/10.1371/journal.pone.0252316https://doaj.org/toc/1932-6203In this paper, we try to analyse the extent to which a redefinition of the monetary policy rule would help to avoid the zero-lower bound, as well as to explore the conditions needed to avoid that constraint. To that aim, we estimate the threshold values of the key variables of the policy rule: the inflation gap and the output gap. The threshold model allows us to know which are the turning points from which the relationship between the key variables and the interest rate revert. In the Eurozone countries, we have found that the inflation gap always contributes to increasing the nominal interest rate. On the contrary, the output gap works differently when it reaches values above or below the threshold value, which would favour the reduction of the interest rates towards the zero level.Carmen Diaz-RoldanMaría A PratsMaria Del Carmen Ramos-HerreraPublic Library of Science (PLoS)articleMedicineRScienceQENPLoS ONE, Vol 16, Iss 5, p e0252316 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	Medicine R Science Q
spellingShingle	Medicine R Science Q Carmen Diaz-Roldan María A Prats Maria Del Carmen Ramos-Herrera Redefining monetary policy rules: A threshold approach.
description	In this paper, we try to analyse the extent to which a redefinition of the monetary policy rule would help to avoid the zero-lower bound, as well as to explore the conditions needed to avoid that constraint. To that aim, we estimate the threshold values of the key variables of the policy rule: the inflation gap and the output gap. The threshold model allows us to know which are the turning points from which the relationship between the key variables and the interest rate revert. In the Eurozone countries, we have found that the inflation gap always contributes to increasing the nominal interest rate. On the contrary, the output gap works differently when it reaches values above or below the threshold value, which would favour the reduction of the interest rates towards the zero level.
format	article
author	Carmen Diaz-Roldan María A Prats Maria Del Carmen Ramos-Herrera
author_facet	Carmen Diaz-Roldan María A Prats Maria Del Carmen Ramos-Herrera
author_sort	Carmen Diaz-Roldan
title	Redefining monetary policy rules: A threshold approach.
title_short	Redefining monetary policy rules: A threshold approach.
title_full	Redefining monetary policy rules: A threshold approach.
title_fullStr	Redefining monetary policy rules: A threshold approach.
title_full_unstemmed	Redefining monetary policy rules: A threshold approach.
title_sort	redefining monetary policy rules: a threshold approach.
publisher	Public Library of Science (PLoS)
publishDate	2021
url	https://doaj.org/article/e5e9d3cabc704eb79f4db29eddd1eb02
work_keys_str_mv	AT carmendiazroldan redefiningmonetarypolicyrulesathresholdapproach AT mariaaprats redefiningmonetarypolicyrulesathresholdapproach AT mariadelcarmenramosherrera redefiningmonetarypolicyrulesathresholdapproach
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Redefining monetary policy rules: A threshold approach.

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