My analysis of low rates and monetary policy–link to Ben Bernanke comments and FEDS version

My paper from the spring Brookings meeting, with John Roberts, has been published in FEDS.  Ben Bernanke discusses the paper here.

Monetary Policy in a Low Interest Rate World

Interest rates may be near zero 40 percent of the time.  My paper (with John Roberts) on the consequences from Brookings.  For a summary, see the FT.

Risks Associated with Low Inflation

Recent papers from the Federal Reserve on

The factors that influence the degree to which low inflation impedes economic performance: Arias, Erceg, and Trabandt (2016)

The interaction of the zero-lower bound on nominal interest rates and the expected rate of inflation in a standard class of macroeconomic models: Hills, Nakata, and Schmidt (2016)

How effective is quantitative easing in stimulating economic activity and raising inflation?

My main research contributions on this topic have now each been published.

Quantitative easing lowers Treasury and corporate bond yields, but the pass through to corporate bond yields is more modest than that associated with a lower federal funds rate: Kiley (2016)

As a result, overall financial conditions improve by less with quantitative easing than with similar movements in the federal funds rate: Kiley (2014a)

And this evidence is consistent with the more limited stimulus associated with long-term interest rates relative to short-term interest rates: Kiley (2014b)

Are the days of rapid economic growth past?

While you may disagree with his assessment of future growth prospects, it is valuable to read Robert Gordon’s “The Rise and Fall of American Growth”. Tyler Cowan’s review