Exchange rates, central bank news and the zero lower bound*

Lombardi, Doménico; Siklos, Pierre L.; Amand, Samantha St.

doi:10.1080/13504851.2016.1184217

Cited by 5 publications

(6 citation statements)

References 2 publications

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“…Lombardi et al . (, forthcoming) concur, relying on a wider array of countries, more recent data, as well controlling for the verbal and written communication of central banks.…”

Section: The International Evidence To Date: Financial Marketsmentioning

confidence: 92%

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A Survey of the International Evidence and Lessons Learned About Unconventional Monetary Policies: Is a ‘New Normal’ in Our Future?

Lombardi¹,

Siklos

Amand

2018

Journal of Economic Surveys

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This study examines the effectiveness of unconventional monetary policies (UMP). It considers whether these policies have been successful and where their effects remain uncertain. We survey both the domestic financial market and macro‐economic effects of UMP in the economies where these policies were introduced and their international spillover effects. The paper considers the impact of a wide range of UMP rather than the effects of specific policy instruments. We also provide a retrospective on the important case of Japan beginning in the late1990s and ask whether the Eurozone's experience with UMP is substantively different given its structure of policymaking. Finally, we ask: if the ‘old normal’ is not in our future, should the ‘new normal’ in monetary policy routinely include what we now refer to as UMP? We conclude that UMP can prevent economic collapse but are not designed to promote stronger long‐term economic growth. Apart from new communication strategies, the use of UMP under normal circumstances does not appear to be a sound monetary policy strategy. Failure to learn this lesson might also enable future policy makers to ask or expect too much from their central banks.

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“…Lombardi et al . (, forthcoming) concur, relying on a wider array of countries, more recent data, as well controlling for the verbal and written communication of central banks.…”

Section: The International Evidence To Date: Financial Marketsmentioning

confidence: 92%

“…(), Acosta and Meade (), Bennani (), Lombardi et al . (, forthcoming), Malmendier et al . () and Meade et al .…”

Section: The International Evidence To Date: Financial Marketsmentioning

confidence: 99%

A Survey of the International Evidence and Lessons Learned About Unconventional Monetary Policies: Is a ‘New Normal’ in Our Future?

Lombardi¹,

Siklos

Amand

2018

Journal of Economic Surveys

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“…In a similar analysis applied to exchange rates,Lombardi, Siklos and St. Amand (2016) find that the exchange rates of small-open economies (Canadian dollar and Swedish krona) remain highly responsive to news event at the ZLB. Although yields are constrained, the exchange rate mechanism may still act as an effective shock absorber.…”

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confidence: 89%

Government Bond Yields at the Effective Lower Bound: International Evidence

2017

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Empirical evidence on the potential impact of central bank policies on government bond yields at the effective lower bound (ELB) is presented for nine economies. We quantify the content of central bank communications and consider international policy spillovers. At the ELB, yields at the medium-to-longer end of the yield curve remain responsive to news for a few years after the ELB is reached. Yields become more sensitive to the content central bank communication at the ELB. Our results provides further evidence that central bank communication is an important element of monetary policy making when the interest rate tool loses efficacy.

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“…Moreover, announcements from the major economies potentially have an outsized influence on the sovereign yields of small‐open economies. Indeed, global capital markets are responsive to U.S. economic conditions and yields respond to U.S. news events (e.g., Lombardi, Siklos, and St. Amand ). Lack of sensitivity to U.S. news events would therefore suggest domestic yields are constrained when policy rates are at the ELB.…”

Section: Data and Econometric Specificationsmentioning

confidence: 99%

“…In a similar analysis applied to exchange rates, Lombardi, Siklos, and St. Amand () find that the exchange rates of small‐open economies (Canadian dollar and Swedish krona) remain highly responsive to news event at the ZLB. Although yields are constrained, the exchange rate mechanism may still act as an effective shock absorber.…”

mentioning

confidence: 95%

Government Bond Yields at the Effective Lower Bound: International Evidence

Lombardi

Siklos

Amand

2017

Contemporary Economic Policy

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Empirical evidence on the potential impact of central bank policies on government bond yields at the effective lower bound (ELB) is presented for nine economies. We quantify the content of central bank communications and consider international policy spillovers. Yields at the medium‐to‐longer end of the yield curve remain responsive to news for a few years after the ELB is reached. Yields become more sensitive to the content central bank communication at the ELB. Our results provide further evidence that central bank communication is an important element of monetary policy making when the interest rate tool loses efficacy. (JEL E52, E58, G12, F42)

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Exchange rates, central bank news and the zero lower bound*

Cited by 5 publications

References 2 publications

A Survey of the International Evidence and Lessons Learned About Unconventional Monetary Policies: Is a ‘New Normal’ in Our Future?

A Survey of the International Evidence and Lessons Learned About Unconventional Monetary Policies: Is a ‘New Normal’ in Our Future?

Government Bond Yields at the Effective Lower Bound: International Evidence

Government Bond Yields at the Effective Lower Bound: International Evidence

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