Deflation probability and the scope for monetary loosening in the United Kingdom

Alex Haberis, Riccardo M. Masolo, Riccardo Maria Masolo, Kate Reinold

Risultato della ricerca: Contributo in rivistaArticolo in rivista

Abstract

We use an estimated DSGE model of the U.K. economy to investigate perceptions of the scope for monetary loosening since the 2007-08 financial crisis. We simulate our model under alternative assumptions about the constraints on monetary policy and compare the implied deflation probabilities with those expected by professional forecasters, financial markets (from options prices), and policymakers. We find that these real-time, external estimates of deflation probability are consistent with policy not having been perceived to have been constrained since the crisis.
Lingua originaleEnglish
pagine (da-a)233-277
Numero di pagine45
RivistaInternational Journal of Central Banking
Volume15
Stato di pubblicazionePubblicato - 2019

Keywords

  • DSGE
  • ZLB
  • inflation

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