EFFECTIVENESS OF MONETARY POLICY IN SWEDEN

Richhild Moessner; Jakob de Haan; David Jan Jansen

doi:10.1111/coep.12160

EFFECTIVENESS OF MONETARY POLICY IN SWEDEN

Richhild Moessner, Jakob de Haan, David Jan Jansen

Research output: Contribution to Journal › Article › Academic › peer-review

Abstract

We study whether the sensitivity of Swedish interest rates to domestic economic news was affected by the zero lower bound (ZLB) and forward guidance. We find that the sensitivity was reduced at the ZLB at short but not at longer maturities, suggesting that monetary policy remained effective at longer horizons. Moreover, it was unaffected during a later period of the ZLB/negative policy rates, suggesting that monetary policy remained effective at all horizons then. We also find that the sensitivity of interest rates to domestic news was unaffected by forward guidance, suggesting that market participants understood the conditionality of the forward guidance. (JEL E52, E58).

Original language	English
Pages (from-to)	698-709
Number of pages	12
Journal	Contemporary Economic Policy
Volume	34
Issue number	4
DOIs	https://doi.org/10.1111/coep.12160
Publication status	Published - 1 Oct 2016
Externally published	Yes

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© 2015 Western Economic Association International

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EFFECTIVENESS OF MONETARY POLICY IN SWEDEN

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