American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Monetary Policy, Financial Stability, and the Zero Lower Bound
American Economic Review
vol. 106,
no. 5, May 2016
(pp. 39–42)
Abstract
Much has happened in the world of central banking in the past decade. In this paper, I focus on three issues associated with the zero lower bound (ZLB) on short-term nominal interest rates and the nexus between monetary policy and financial stability: 1) whether we are moving toward a permanently lower long-run equilibrium real interest rate; 2) what steps can be taken to mitigate the constraints imposed by the ZLB; and 3) whether and how financial stability considerations should be incorporated in the conduct of monetary policy. These important topics deserve the attention of both academic and government professionals.Citation
Fischer, Stanley. 2016. "Monetary Policy, Financial Stability, and the Zero Lower Bound." American Economic Review, 106 (5): 39–42. DOI: 10.1257/aer.p20161005Additional Materials
JEL Classification
- E43 Interest Rates: Determination, Term Structure, and Effects
- E44 Financial Markets and the Macroeconomy
- E52 Monetary Policy
- E58 Central Banks and Their Policies