Negative policy rates can convince markets that deposit rates will remain lower-for-longer, even when current deposit rates are constrained by zero. This is the signalling channel of negative interest rates. We analyse the optimality and effectiveness of negative rates in the context of this novel transmission channel. In a stylized model, we prove two necessary conditions for optimality: time-consistency ...
The European Central Bank (ECB) is currently facing major challenges. Fragmentation of government bond yields across Member States of the European Economic and Monetary Union, based on different economic and fiscal policies, hampers a uniform transmission of monetary policy. At the same time, climate-related financial risks need to be addressed. In recent years, the ECB is meeting these challenges ...
We examine the causal relationship between US monetary policy shocks, exchange rates and currency excess returns for a sample of eight advanced countries over the period 1980M1 to 2022M11. We find that the dynamics of the US dollar exchange rate is the main driver of currency excess returns. The exchange rate is significantly affected by US monetary policy shocks, where the persistence of this shock ...
Vorstellung des Finanzstabilitätsberichts 2022 Wir bitten um Anmeldung per E-Mail an: akegel@diw.de
EZB fürchtet uneinheitliche Entwicklung der Anleiherenditen durch straffere Geldpolitik und kündigt Notfallprogramm TPI an – DIW-Schätzmodell untersucht aktuelle Treiber der unterschiedlichen Zinsentwicklung im Euroraum – Bisher keine Marktirrationalitäten zu erkennen: Zinsen werden durch länderspezifische Fundamentaldaten und allgemeine Risikobewertung getrieben Die ...