Estimating the Effective Lower Bound on the Czech National Bank's Policy Rate

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216208%3A11230%2F18%3A10384587" target="_blank" >RIV/00216208:11230/18:10384587 - isvavai.cz</a>

Result on the web

<a href="http://journal.fsv.cuni.cz/mag/article/show/id/1422" target="_blank" >http://journal.fsv.cuni.cz/mag/article/show/id/1422</a>

DOI - Digital Object Identifier

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Result language

angličtina

Original language name

Estimating the Effective Lower Bound on the Czech National Bank's Policy Rate

Original language description

This paper focuses on the estimation of the effective lower bound on the Czech National Bank&apos;s policy rate. The effective lower bound is determined by the value below which holding and using cash would be preferable to holding deposits with negative yields. This bound is approximated on the basis of the storage, insurance and transportation costs of cash and the loss of convenience associated with cashless payments. This estimate is complemented by a calculation based on interest charges reflecting the impact of negative rates on banks&apos; profitability. Overall we get a mean of slightly below -1%, approximately in the interval (-2.0%, -0.4%). In addition, by means of a vector autoregression we show that the potential of negative rates is not sufficient to deliver monetary policy easing similar in its effects to the impact of the exchange rate commitment during the years 2013-2017.

Czech name

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Czech description

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Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

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OECD FORD branch

50201 - Economic Theory

Project

<a href="/en/project/GBP402%2F12%2FG097" target="_blank" >GBP402/12/G097: DYME-Dynamic Models in Economics</a><br>

Continuities

P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)

Publication year

2018

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Finance a úvěr

ISSN

0015-1920

e-ISSN

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Volume of the periodical

68

Issue of the periodical within the volume

6

Country of publishing house

CZ - CZECH REPUBLIC

Number of pages

28

Pages from-to

550-577

UT code for WoS article

000454687400005

EID of the result in the Scopus database

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