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Abstract We examine the redistributive effects of forward guidance under the zero lower bound. We show that the effects of forward guidance depend on savers’ asset positions and the nature… Click to show full abstract
Abstract We examine the redistributive effects of forward guidance under the zero lower bound. We show that the effects of forward guidance depend on savers’ asset positions and the nature of financial frictions. If borrowers are constrained on the issuance of new debt, savers’ wealth is exposed to future inflation and real interest rates. In some cases, a negative wealth effect is strong in that forward guidance cannot mitigate recession.
Keywords:
redistributive effects;
forward guidance;
guidance;
effects forward
Journal Title: Economics Letters
Year Published: 2019
Link to full text (if available)
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Journal Title: Economics Letters
Year Published: 2019
Link to full text (if available)
Share on Social Media: Sign Up to like & get
recommendations!