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Lecture 12 Outline

Lecture 12 Outline - G Raising expected future real growth...

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Economics 134 Professor Christina Romer Spring 2012 Professor David Romer LECTURE 12 THE ZERO LOWER BOUND IN PRACTICE FEBRUARY 23, 2012 I. R EVIEW OF THE IS-MP F RAMEWORK AT THE Z ERO L OWER B OUND A. IS same as ever B. MP is affected by zero lower bound II. S TRATEGIES FOR D EALING WITH THE Z ERO L OWER B OUND A. Starting point: IS shifts back enough that we are in flat portion of MP B. Fiscal policy C. Non-standard open market operations (or quantitative easing) D. Communications policy E. Deliberate currency depreciation F. Methods to raise expected inflation
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Unformatted text preview: G. Raising expected future real growth III. J APAN IN THE 1990 S AND 2000 S A. Diagnosis of the problem B. Bernanke’s critique of Japanese monetary policy C. Japan’s growth record IV. U NITED S TATES IN THE 1930 S A. Recovery in the 1930s B. Devaluation as a regime shift C. Actual fiscal and monetary expansion V. U NITED S TATES SINCE 2008 A. Major IS shock in fall 2008; quickly hit the zero nominal bound B. Impact of large-scale asset purchases (quantitative easing) C. Federal Reserve communications policy...
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