The Empirical Implications of the Zero Lower Bound on the Interest Rate: The Case of the Czech Economy
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216224%3A14560%2F16%3A00089844" target="_blank" >RIV/00216224:14560/16:00089844 - isvavai.cz</a>
Result on the web
<a href="http://acta.mendelu.cz/64/2/0603/" target="_blank" >http://acta.mendelu.cz/64/2/0603/</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.11118/actaun201664020603" target="_blank" >10.11118/actaun201664020603</a>
Alternative languages
Result language
angličtina
Original language name
The Empirical Implications of the Zero Lower Bound on the Interest Rate: The Case of the Czech Economy
Original language description
This paper uses an estimated DSGE model of the Czech economy to study the macroeconomic implications of various shocks when the interest rate is constrained by the zero lower bound. The goal is to identify which shocks represent threats for the economy and how large the distortions are. The results show that four single shocks can take the economy to the zero lower bound, and that of the four, productivity shock in the tradable sector is the most dangerous. The consequences for the behaviour of macroeconomic variables are nontrivial and, quite naturally, increase with the size of the shock and the frequency of occurrence. If the economy is subject to all model specific shocks, there are distortions in terms of lower average values of output and consumption (by more than one percentage point) and higher inflation volatility (by more than six percentage points). To reduce these costs, the central bank should give higher weight to inflation and lower weight to the output gap in monetary policy rule.
Czech name
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Czech description
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Classification
Type
J<sub>x</sub> - Unclassified - Peer-reviewed scientific article (Jimp, Jsc and Jost)
CEP classification
AH - Economics
OECD FORD branch
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Result continuities
Project
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Continuities
S - Specificky vyzkum na vysokych skolach
Others
Publication year
2016
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Data specific for result type
Name of the periodical
Acta universitatis agriculturae et silviculturae Mendelianae Brunensis
ISSN
1211-8516
e-ISSN
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Volume of the periodical
64
Issue of the periodical within the volume
2
Country of publishing house
CZ - CZECH REPUBLIC
Number of pages
14
Pages from-to
603-616
UT code for WoS article
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EID of the result in the Scopus database
2-s2.0-84970024867