Optimal Monetary Policy at the Zero-Interest-Rate Bound
研究央行在短期名义利率降至零后如何应对总需求疲软，发现最优政策存在惯性，即自然利率回升后仍应维持零利率一段时间，以推高通胀、压低长期利率并削弱本币。
What should a central bank do when faced with a weak aggregate demand even after reducing the short-term nominal interest rate to zero? To address this question, we solve a central bank's intertemporal loss minimization problem, in which the non-negativity constraint on nominal interest rates is explicitly considered. We find that the optimal path is characterized by policy inertia, in the sense that a zero interest rate policy should be continued for a while even after the natural rate of interest returns to a positive level. By making such a commitment, the central bank is able to achieve higher expected inflation, lower long-term nominal interest rates, and a weaker domestic currency in the adverse periods when the natural rate of interest significantly deviates from a steady-state level.