The Zero Interest Rate Floor (ZIF) and its Implications for Monetary Policy in Japan [electronic resource] / Douglas Laxton.
Material type:
TextSeries: IMF Working Papers; Working Paper ; No. 01/186Publication details: Washington, D.C. : International Monetary Fund, 2001Description: 1 online resource (37 p.)ISBN: 1451859465 :ISSN: 1018-5941Subject(s): Inflation Target | Inflation | Liquidity Trap | Monetary Policy Rules | Price Level | Uncertainty | JapanAdditional physical formats: Print Version:: The Zero Interest Rate Floor (ZIF) and its Implications for Monetary Policy in JapanOnline resources: IMF e-Library | IMF Book Store Abstract: 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.
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.
Description based on print version record.
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