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BIS Working Papers

BIS Working Papers No 983 Losing traction? The real effects of monetary policy when interest rates are low by Rashad Ahmed, Claudio Borio, Piti Disyatat and Boris Hofmann Monetary and Economic Department November 2021 JEL classification: E20, E52, E58. Keywords: monetary policy, low interest rates, monetary transmission mechanism. BIS Working Papers are written by members of the Monetary and Economic Department of the Bank for International Settlements, and from time to time by other economists, and are published by the Bank.

decline in equilibrium interest rates. We also find evidence that the effectiveness of monetary policy wanes the longer interest ra tes stay low. These findings suggest that the observed flattening of the Phillips curve has gone hand in hand with a corresponding steepening of the IS curve. Monetary policy trade-offs may have become more ...

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  Evidence, Curves, Phillips, Of the phillips curve

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