Five panels in this figure show policy functions for the model's key variables (nominal interest rate, inflation, output, real wage, and real interest rate). In all panels, dashed and solid black lines are for deterministic and stochastic models, respectively. y-axis is for the model's variables, while the x-axis is for the model's state variable, the discount factor shock.
This histogram shows the unconditional distribution of inflation from the stylized model. Dashed black, solid black, and solid red verical lines are for the inflation target, the risky steady-state inflation, and the average inflation.
Black, red, and blue lines in the left panel show how the conditional average of inflation away from the ELB, the unconditional average inflation, and the risky steady-state inflation, vary with the probability of being at the ELB, respectively, in the perfect-foresight version of the stylized model. The dashed black line in the right panel shows how the conditional average of inflation at the ELB vary with the probability of being at the ELB.
Solid and dashed balck lines represent the standard and risky-adjusted Fisher relation, respectively, while the solid red line represents the Taylor rule. x-axis is for inflation and y-axis is for the policy rate.
Figure 5: Output Gap, Inflation, and Policy Rate
Year | Output Gap (%) | Inflation (Annualized %) | Policy Rate (Annualized %) |
---|---|---|---|
1995Q3 | -1.1024 | 1.8681 | 5.80 |
1995Q4 | -0.8934 | 2.0071 | 5.72 |
1996Q1 | -0.7307 | 1.5967 | 5.37 |
1996Q2 | -0.3459 | 1.8680 | 5.24 |
1996Q3 | -0.0762 | 1.8241 | 5.31 |
1996Q4 | 0.3284 | 2.2611 | 5.28 |
1997Q1 | 0.5560 | 1.5669 | 5.28 |
1997Q2 | 0.7784 | 2.0612 | 5.52 |
1997Q3 | 1.1100 | 0.9021 | 5.53 |
1997Q4 | 1.2190 | 1.2493 | 5.51 |
1998Q1 | 1.3348 | 1.1081 | 5.52 |
1998Q2 | 1.5218 | 1.2126 | 5.50 |
1998Q3 | 1.6796 | 1.3942 | 5.53 |
1998Q4 | 2.1750 | 1.2290 | 4.86 |
1999Q1 | 2.3928 | 1.2882 | 4.73 |
1999Q2 | 2.4137 | 1.2406 | 4.75 |
1999Q3 | 2.5808 | 1.3715 | 5.10 |
1999Q4 | 2.9474 | 1.8177 | 5.30 |
2000Q1 | 3.0564 | 2.2057 | 5.68 |
2000Q2 | 2.9695 | 1.3105 | 6.27 |
2000Q3 | 2.7756 | 1.8268 | 6.52 |
2000Q4 | 2.2418 | 1.9268 | 6.47 |
2001Q1 | 1.9196 | 2.2645 | 5.60 |
2001Q2 | 1.1536 | 1.5571 | 4.33 |
2001Q3 | 0.0954 | 1.1424 | 3.50 |
2001Q4 | -0.6639 | 2.0329 | 2.13 |
2002Q1 | -0.5469 | 1.1426 | 1.73 |
2002Q2 | -0.5692 | 2.3385 | 1.75 |
2002Q3 | -0.7025 | 2.0691 | 1.74 |
2002Q4 | -0.8748 | 1.3905 | 1.44 |
2003Q1 | -1.3850 | 0.9736 | 1.25 |
2003Q2 | -1.3001 | 1.4501 | 1.25 |
2003Q3 | -0.6777 | 1.6204 | 1.02 |
2003Q4 | -0.3770 | 1.3986 | 1.00 |
2004Q1 | -0.2096 | 2.1666 | 1.00 |
2004Q2 | -0.0592 | 2.4260 | 1.01 |
2004Q3 | 0.2309 | 1.8416 | 1.43 |
2004Q4 | 0.1861 | 1.8728 | 1.95 |
2005Q1 | 0.3483 | 2.5510 | 2.47 |
2005Q2 | 0.5029 | 2.1348 | 2.94 |
2005Q3 | 0.5965 | 1.6607 | 3.46 |
2005Q4 | 0.9895 | 2.6186 | 3.98 |
2006Q1 | 1.7380 | 2.0368 | 4.45 |
2006Q2 | 1.6366 | 2.6948 | 4.91 |
2006Q3 | 1.6256 | 2.1482 | 5.25 |
2006Q4 | 1.8730 | 1.6825 | 5.24 |
2007Q1 | 1.6530 | 2.8440 | 5.25 |
2007Q2 | 1.6045 | 1.4099 | 5.25 |
2007Q3 | 1.1378 | 1.9644 | 5.07 |
2007Q4 | 0.6053 | 2.7013 | 4.50 |
2008Q1 | -0.2612 | 2.3063 | 3.18 |
2008Q2 | -1.0208 | 2.0161 | 2.08 |
2008Q3 | -2.3962 | 1.8074 | 1.94 |
2008Q4 | -4.8304 | 0.3994 | 0.51 |
2009Q1 | -6.7935 | 0.4756 | 0.18 |
2009Q2 | -7.6821 | 1.9484 | 0.18 |
2009Q3 | -7.8556 | 1.1257 | 0.15 |
2009Q4 | -7.3819 | 2.0853 | 0.12 |
2010Q1 | -7.2879 | 1.0213 | 0.13 |
2010Q2 | -6.7868 | 1.0584 | 0.19 |
2010Q3 | -5.9754 | 0.9805 | 0.19 |
2010Q4 | -5.6557 | 0.8085 | 0.19 |
2011Q1 | -5.7566 | 1.3539 | 0.15 |
2011Q2 | -5.5174 | 2.4281 | 0.09 |
2011Q3 | -5.2421 | 2.0157 | 0.08 |
2011Q4 | -4.6046 | 1.5983 | 0.07 |
2012Q1 | -3.8440 | 2.2372 | 0.10 |
2012Q2 | -3.7782 | 1.8751 | 0.15 |
2012Q3 | -3.8045 | 1.2353 | 0.14 |
2012Q4 | -3.4665 | 1.7195 | 0.16 |
2013Q1 | -3.3672 | 1.7312 | 0.14 |
2013Q2 | -2.9928 | 1.2134 | 0.12 |
2013Q3 | -2.6829 | 1.3868 | 0.09 |
2013Q4 | -2.1906 | 1.6787 | 0.09 |
2014Q1 | -2.3117 | 1.4212 | 0.07 |
2014Q2 | -1.7074 | 1.9565 | 0.09 |
2014Q3 | -1.0186 | 1.3796 | 0.09 |
2014Q4 | -0.5422 | 0.9831 | 0.10 |
2015Q1 | -0.6543 | 0.9585 | 0.11 |
2015Q2 | -0.6159 | 1.8279 | 0.13 |
Figure 6: 10-Year Inflation Expectations
Year | 10-yr Inflation Expectations |
---|---|
1991Q4 | 4.00 |
1992Q1 | 3.70 |
1992Q2 | 3.90 |
1992Q3 | 3.75 |
1992Q4 | 3.60 |
1993Q1 | 3.50 |
1993Q2 | 3.70 |
1993Q3 | 3.45 |
1993Q4 | 3.45 |
1994Q1 | 3.45 |
1994Q2 | 3.50 |
1994Q3 | 3.50 |
1994Q4 | 3.50 |
1995Q1 | 3.30 |
1995Q2 | 3.35 |
1995Q3 | 3.20 |
1995Q4 | 3.00 |
1996Q1 | 3.00 |
1996Q2 | 3.00 |
1996Q3 | 3.00 |
1996Q4 | 3.00 |
1997Q1 | 3.00 |
1997Q2 | 2.85 |
1997Q3 | 3.00 |
1997Q4 | 2.65 |
1998Q1 | 2.60 |
1998Q2 | 2.50 |
1998Q3 | 2.50 |
1998Q4 | 2.50 |
1999Q1 | 2.30 |
1999Q2 | 2.50 |
1999Q3 | 2.50 |
1999Q4 | 2.50 |
2000Q1 | 2.50 |
2000Q2 | 2.50 |
2000Q3 | 2.50 |
2000Q4 | 2.50 |
2001Q1 | 2.50 |
2001Q2 | 2.50 |
2001Q3 | 2.50 |
2001Q4 | 2.55 |
2002Q1 | 2.50 |
2002Q2 | 2.50 |
2002Q3 | 2.50 |
2002Q4 | 2.45 |
2003Q1 | 2.50 |
2003Q2 | 2.50 |
2003Q3 | 2.50 |
2003Q4 | 2.50 |
2004Q1 | 2.50 |
2004Q2 | 2.50 |
2004Q3 | 2.50 |
2004Q4 | 2.50 |
2005Q1 | 2.45 |
2005Q2 | 2.50 |
2005Q3 | 2.50 |
2005Q4 | 2.50 |
2006Q1 | 2.50 |
2006Q2 | 2.50 |
2006Q3 | 2.50 |
2006Q4 | 2.50 |
2007Q1 | 2.35 |
2007Q2 | 2.40 |
2007Q3 | 2.40 |
2007Q4 | 2.40 |
2008Q1 | 2.50 |
2008Q2 | 2.50 |
2008Q3 | 2.50 |
2008Q4 | 2.50 |
2009Q1 | 2.40 |
2009Q2 | 2.50 |
2009Q3 | 2.50 |
2009Q4 | 2.26 |
2010Q1 | 2.39 |
2010Q2 | 2.40 |
2010Q3 | 2.30 |
2010Q4 | 2.20 |
2011Q1 | 2.30 |
2011Q2 | 2.40 |
2011Q3 | 2.40 |
2011Q4 | 2.50 |
2012Q1 | 2.30 |
2012Q2 | 2.48 |
2012Q3 | 2.35 |
2012Q4 | 2.30 |
2013Q1 | 2.30 |
2013Q2 | 2.30 |
2013Q3 | 2.21 |
2013Q4 | 2.30 |
2014Q1 | 2.30 |
2014Q2 | 2.25 |
2014Q3 | 2.20 |
2014Q4 | 2.20 |
2015Q1 | 2.10 |
2015Q2 | 2.14 |
In the top-left panel,the black line shows how the probability of being at the ELB varies with the detereministic steady-state policy rate. In the top-right panel, the solid and dashed black lines show how the risky steady-state inflation rates vary with the detereministic steady-state policy rate in the model with and without the ELB constraint, respectively. In the bottom-left panel, the solid and dashed black lines show how the risky steady-state output gaps vary with the detereministic steady-state policy rate in the model with and without the ELB constraint, respectively. In the bottom-right panel, the solid and dashed black lines show how the risky steady-state policy rates vary with the detereministic steady-state policy rate in the model with and without the ELB constraint, respectively. In all panels, x-axis is for the deterministic steady-state policy rate.\
Five panels in this figure show how the risky steady-state inflation and the ELB frequency depend on key parameters governing monetary policy: From the top-left to the bottom middle panel, x-axis is for inflation coefficient, output gap coefficient, interest-rate smoothing parameter, inflation target, and the effective lower bound.
Figure 9: Conditional Averages of Inflation Away From the ELB
Countries | 10-yr Inflation Expectations |
---|---|
United States | 1.8152 |
Canada | 1.6339 |
Euro Area (19 countries) | 1.5371 |
United Kingdom | 1.4120 |
Sweden | 0.7316 |
Switzerland | 0.8272 |
Figure E.1: Expected Time Until Liftoff
Blue Chip Economic Indicators
Date | E[ELB_Duration] (in quarters) |
---|---|
2009-01-10 | 2.5644 |
2009-02-10 | 2.2247 |
2009-03-10 | 1.9178 |
2009-04-10 | 2.5041 |
2009-05-10 | 2.1753 |
2009-06-10 | 2.7945 |
2009-07-10 | 2.4658 |
2009-08-10 | 2.1260 |
2009-09-10 | 2.8274 |
2009-10-10 | 2.4986 |
2009-11-10 | 2.1589 |
2009-12-10 | 2.8932 |
2010-01-10 | 2.5534 |
2010-02-10 | 2.2137 |
2010-03-10 | 1.9068 |
2010-04-10 | 2.4932 |
2010-05-10 | 2.1644 |
2010-06-10 | 1.8247 |
2010-07-10 | 2.4548 |
2010-08-10 | 3.1562 |
2010-09-10 | 3.8849 |
2010-10-10 | 3.5562 |
2010-11-10 | 4.1370 |
2010-12-10 | 3.8082 |
2011-01-10 | 3.4685 |
2011-02-10 | 3.1288 |
2011-03-10 | 2.8219 |
2011-04-10 | 2.4822 |
2011-05-10 | 3.1123 |
2011-06-10 | 2.7726 |
2011-07-10 | 2.4438 |
2011-08-10 | 4.1479 |
2011-09-10 | . |
2011-10-10 | 7.0027 |
2011-11-10 | . |
2011-12-10 | . |
2012-01-10 | 6.4932 |
2012-02-10 | 7.1507 |
2012-03-10 | 6.8329 |
2012-04-10 | 6.4932 |
2012-05-10 | 6.1644 |
2012-06-10 | . |
2012-07-10 | . |
2012-08-10 | . |
2012-09-10 | . |
2012-10-10 | 6.9808 |
2012-11-10 | . |
2012-12-10 | . |
2013-01-10 | . |
2013-02-10 | . |
2013-03-10 | 8.8219 |
2013-04-10 | . |
2013-05-10 | . |
2013-06-10 | . |
2013-07-10 | 7.5910 |
2013-08-10 | 7.2411 |
2013-09-10 | 7.0767 |
2013-10-10 | 6.4712 |
2013-11-15 | 7.0659 |
2013-12-10 | 7.1545 |
2014-01-10 | 6.6323 |
2014-02-10 | 6.0569 |
2014-03-10 | 5.8192 |
2014-04-10 | 5.4795 |
2014-05-10 | 5.1507 |
2014-06-10 | 4.8110 |
2014-07-10 | 4.4822 |
2014-08-10 | 3.5906 |
2014-09-10 | 3.1815 |
2014-10-10 | 3.4740 |
2014-11-10 | 2.5805 |
2014-12-10 | 2.3206 |
2015-01-10 | 1.9814 |
2015-02-10 | 1.9365 |
2015-03-10 | 1.8192 |
2015-04-10 | 1.6469 |
2015-05-10 | 1.4719 |
2015-06-10 | 1.2040 |
2015-07-10 | 0.8827 |
2015-08-10 | 0.5713 |
Figure E.1: Expected Time Until Liftoff
Blue Chip Financial Forecasts
Date | E[ELB_Duration] (in quarters) |
---|---|
2009-01-01 | 3.5890 |
2009-02-01 | 4.2082 |
2009-03-01 | 3.9014 |
2009-04-01 | 4.6027 |
2009-05-01 | 4.2740 |
2009-06-01 | 3.9342 |
2009-07-01 | 3.6055 |
2009-08-01 | 3.2658 |
2009-09-01 | 2.9260 |
2009-10-01 | 3.6603 |
2009-11-01 | 3.3205 |
2009-12-01 | 2.9918 |
2010-01-01 | 2.6521 |
2010-02-01 | 2.3123 |
2010-03-01 | 2.9315 |
2010-04-01 | 2.5918 |
2010-05-01 | 2.2630 |
2010-06-01 | 2.8822 |
2010-07-01 | 2.5534 |
2010-08-01 | 3.2548 |
2010-09-01 | 3.9836 |
2010-10-01 | 3.6548 |
2010-11-01 | 4.2356 |
2010-12-01 | 3.9068 |
2011-01-01 | 4.5260 |
2011-02-01 | 4.1863 |
2011-03-01 | 3.8795 |
2011-04-01 | 3.5397 |
2011-05-01 | 3.2110 |
2011-06-01 | 2.8712 |
2011-07-01 | 3.5836 |
2011-08-01 | 3.2438 |
2011-09-01 | . |
2011-10-01 | . |
2011-11-01 | . |
2011-12-01 | 7.4301 |
2012-01-01 | . |
2012-02-01 | . |
2012-03-01 | . |
2012-04-01 | . |
2012-05-01 | . |
2012-06-01 | 8.4164 |
2012-07-01 | . |
2012-08-01 | . |
2012-09-01 | . |
2012-10-01 | . |
2012-11-01 | . |
2012-12-01 | 8.9041 |
2013-01-01 | . |
2013-02-01 | . |
2013-03-01 | . |
2013-04-01 | 8.3314 |
2013-05-01 | 8.4853 |
2013-06-01 | 7.9068 |
2013-07-01 | 7.0776 |
2013-08-01 | 7.2719 |
2013-09-01 | 6.8435 |
2013-10-01 | 7.0906 |
2013-11-01 | 7.2400 |
2013-12-01 | 6.9041 |
2014-01-01 | 6.8658 |
2014-02-01 | 6.2001 |
2014-03-01 | 5.9678 |
2014-04-01 | 5.2017 |
2014-05-01 | 5.0189 |
2014-06-01 | 4.9096 |
2014-07-01 | 4.1549 |
2014-08-01 | 3.5061 |
2014-09-01 | 3.0869 |
2014-10-01 | 2.7344 |
2014-11-01 | 2.7050 |
2014-12-01 | 2.9041 |
2015-01-01 | 1.9900 |
2015-02-01 | 1.8799 |
2015-03-01 | 1.6910 |
2015-04-01 | 1.5427 |
2015-05-01 | 1.4441 |
2015-06-01 | 1.9014 |
2015-07-01 | 0.9774 |
2015-08-01 | 0.7188 |
Figure E.1: Expected Time Until Liftoff
Primary Dealers Survey
DateNum | E[ELB_Duration] (in quarters) (mean approach) |
---|---|
2011 | 5.7315 |
2011.125 | 4.7781 |
2011.25 | 4.2301 |
2011.375 | 4.2301 |
2011.5 | 5.1288 |
2011.625 | 8.0767 |
2011.75 | 8.3397 |
2011.875 | 8.0767 |
2012 | 10.4329 |
2012.125 | 10.2685 |
2012.25 | 9.6877 |
2012.375 | 9.5781 |
2012.5 | 10.3781 |
2012.625 | 10.5973 |
2012.75 | 11.1014 |
2012.875 | 10.3671 |
2013 | 10.2904 |
2013.125 | 9.7315 |
2013.25 | 9.2822 |
2013.375 | 8.4384 |
2013.5 | 8.2082 |
2013.625 | 7.7699 |
2013.75 | 7.7808 |
2013.875 | 7.5836 |
2014 | 7.0137 |
2014.125 | 6.1479 |
2014.25 | 5.7644 |
2014.375 | 5.2932 |
2014.5 | 4.0438 |
2014.625 | 3.3205 |
2014.75 | 2.9808 |
2014.875 | 2.3123 |
2015 | 2.2137 |
2015.125 | 1.3808 |
2015.25 | 1.4575 |
2015.375 | 1.3151 |
2015.5 | 0.9973 |
2015.625 | 0.4932 |
Figure E.1: Expected Time Until Liftoff
Survey of Professional Forecasters
Date | Expected Duration (in quarters) |
---|---|
2009Q1 | 3 |
2009Q2 | 3 |
2009Q3 | 3 |
2009Q4 | 3 |
2010Q1 | 3 |
2010Q2 | 2 |
2010Q3 | 4 |
2010Q4 | 4 |
2011Q1 | 5 |
2011Q2 | 3 |
2011Q3 | 4 |
2011Q4 | 6 |
2012Q1 | 9 |
2012Q2 | 8 |
2012Q3 | 11 |
2012Q4 | 10 |
2013Q1 | 9 |
2013Q2 | 8 |
2013Q3 | 11 |
2013Q4 | 10 |
2014Q1 | 9 |
2014Q2 | 8 |
2014Q3 | 4 |
2014Q4 | 4 |
2015Q1 | 3 |
2015Q2 | 2 |
2015Q3 | 2 |
Figure F.1: Policy Rates and Inflation in Six Economies
Time | US, Policy Rate (in annualized %) | US, Core Inflation (in annualized %) (in quarters) | Canada, Policy Rate (in annualized %) | Canada, Core Inflation (in annualized %) (in quarters) | Euro Area (19 countries), Policy Rate (in annualized %) | Euro Area (19 countries), Core Inflation (in annualized %) (in quarters) | United Kingdom, Policy Rate (in annualized %) | United Kingdom, Core Inflation (in annualized %) (in quarters) | Sweden, Policy Rate (in annualized %) | Sweden, Core Inflation (in annualized %) (in quarters) | Switzerland, Policy Rate (in annualized %) | Switzerland, Core Inflation (in annualized %) (in quarters) |
---|---|---|---|---|---|---|---|---|---|---|---|---|
1995q1 | 5.83 | 2.2648 | 8.22 | 1.2876 | 6.45 | 3.1200 | 7.80 | 2.6036 | 3.89 | 1.3141 | ||
1995q2 | 6.00 | 2.1661 | 6.72 | 2.4732 | 6.63 | 3.4561 | 8.46 | 2.7744 | 3.36 | 2.0213 | ||
1995q3 | 5.76 | 2.0774 | 6.46 | 2.5874 | 6.63 | 3.7090 | 8.90 | 2.8255 | 2.87 | 2.2820 | ||
1995q4 | 5.71 | 2.0708 | 5.54 | 2.2466 | 6.58 | 3.0352 | 8.91 | 2.7023 | 2.14 | 2.2825 | ||
1996q1 | 5.33 | 1.9560 | 5.00 | 1.6658 | 6.13 | 2.6085 | 8.28 | 2.6646 | 1.77 | 1.3842 | ||
1996q2 | 5.25 | 1.8476 | 4.75 | 1.4660 | 5.87 | 1.9202 | 6.70 | 1.8061 | 2.21 | 0.8591 | ||
1996q3 | 5.25 | 1.8377 | 4.00 | 1.3963 | 5.69 | 1.7480 | 5.48 | 0.6971 | 2.32 | 0.7423 | ||
1996q4 | 5.25 | 1.9008 | 3.00 | 1.5222 | 5.86 | 2.4559 | 4.61 | -0.1643 | 1.92 | 0.6347 | ||
1997q1 | 5.27 | 1.8932 | 3.00 | 1.7444 | 5.94 | 2.0232 | 4.10 | -1.3832 | 1.82 | 0.5680 | ||
1997q2 | 5.50 | 1.9422 | 3.00 | 1.8299 | 6.20 | 1.8128 | 4.10 | -0.7500 | 1.64 | 0.5055 | ||
1997q3 | 5.50 | 1.7070 | 3.25 | 1.6075 | 6.87 | 1.8115 | 4.10 | -0.1573 | 1.50 | 0.2575 | ||
1997q4 | 5.50 | 1.4525 | 4.25 | 1.2506 | 7.15 | 1.7949 | 4.13 | 0.7501 | 1.85 | 0.1037 | ||
1998q1 | 5.50 | 1.3366 | 4.75 | 1.4532 | 7.25 | 1.6893 | 4.35 | 0.2986 | 1.21 | 0.0043 | ||
1998q2 | 5.50 | 1.1227 | 4.75 | 1.2529 | 7.33 | 1.6352 | 4.29 | -0.1265 | 1.69 | 0.0664 | ||
1998q3 | 5.49 | 1.2468 | 5.50 | 1.3560 | 7.50 | 1.3435 | 4.10 | -0.4754 | 1.84 | 0.2610 | ||
1998q4 | 4.92 | 1.2405 | 5.00 | 1.5301 | 6.86 | 1.2235 | 3.82 | -1.0847 | 1.48 | 0.3063 | ||
1999q1 | 4.75 | 1.2872 | 4.75 | 0.9431 | 3.00 | 1.3473 | 5.69 | 1.0112 | 3.27 | 0.1472 | 1.28 | 0.6050 |
1999q2 | 4.75 | 1.2942 | 4.50 | 1.5180 | 2.53 | 1.1554 | 5.20 | 0.7866 | 2.90 | 0.3866 | 1.05 | 0.7910 |
1999q3 | 5.10 | 1.2885 | 4.50 | 1.7452 | 2.50 | 1.1025 | 5.07 | 0.6449 | 2.90 | 0.7948 | 1.17 | 0.9479 |
1999q4 | 5.38 | 1.4384 | 4.75 | 1.7064 | 2.81 | 1.0224 | 5.41 | 0.3555 | 3.07 | 0.9653 | 2.07 | 1.1374 |
2000q1 | 5.69 | 1.6691 | 5.25 | 1.7130 | 3.21 | 0.9989 | 5.87 | 0.1073 | 3.55 | -0.3660 | 2.27 | 1.3731 |
2000q2 | 6.25 | 1.6868 | 5.75 | 1.5310 | 3.82 | 0.9685 | 6.00 | 0.0000 | 3.75 | -0.3303 | 3.14 | 1.1890 |
2000q3 | 6.50 | 1.8021 | 5.75 | 1.6034 | 4.34 | 0.9505 | 6.00 | 0.0000 | 3.75 | -0.3831 | 3.44 | 0.9601 |
2000q4 | 6.50 | 1.8297 | 5.75 | 1.8721 | 4.74 | 1.2807 | 6.00 | 0.2480 | 3.79 | -0.0985 | 3.49 | 1.0824 |
2001q1 | 5.61 | 1.8446 | 5.00 | 1.9919 | 4.75 | 1.3089 | 5.86 | 0.4643 | 4.00 | 1.1743 | 3.43 | 0.8352 |
2001q2 | 4.32 | 1.9072 | 4.50 | 2.2671 | 4.60 | 1.9110 | 5.37 | 1.0642 | 4.00 | 1.6851 | 3.20 | 1.3372 |
2001q3 | 3.56 | 1.7337 | 3.50 | 2.3348 | 4.34 | 1.8794 | 5.06 | 1.5664 | 4.16 | 2.1191 | 3.08 | 1.0664 |
2001q4 | 2.14 | 1.7605 | 2.25 | 1.7705 | 3.47 | 2.2492 | 4.23 | 1.2014 | 3.75 | 2.2245 | 2.06 | 0.8005 |
2002q1 | 1.75 | 1.4767 | 2.00 | 1.9211 | 3.25 | 2.4787 | 4.00 | 1.6353 | 3.78 | 1.5577 | 1.71 | 0.2966 |
2002q2 | 1.75 | 1.6742 | 2.50 | 2.4040 | 3.25 | 2.4679 | 4.00 | 1.2987 | 4.16 | 1.7597 | 1.38 | 0.7613 |
2002q3 | 1.75 | 1.9091 | 2.75 | 2.8720 | 3.25 | 2.4107 | 4.00 | 1.2969 | 4.25 | 1.5883 | 0.88 | 0.2920 |
2002q4 | 1.45 | 1.7462 | 2.75 | 3.5291 | 3.12 | 2.2601 | 4.00 | 1.6760 | 4.10 | 1.5740 | 0.72 | 0.8948 |
2003q1 | 1.25 | 1.7033 | 3.00 | 3.6438 | 2.68 | 1.8769 | 3.85 | 1.5390 | 3.71 | 1.0763 | 0.52 | 0.7779 |
2003q2 | 1.23 | 1.4787 | 3.25 | 2.6196 | 2.35 | 1.8791 | 3.75 | 1.2821 | 3.39 | 0.4811 | 0.29 | 0.4834 |
2003q3 | 1.00 | 1.3655 | 2.75 | 1.6586 | 2.00 | 1.7069 | 3.53 | 1.2803 | 2.77 | -0.0354 | 0.27 | 0.2350 |
2003q4 | 1.00 | 1.3676 | 2.75 | 1.7945 | 2.00 | 1.6993 | 3.65 | 1.0302 | 2.75 | -0.3456 | 0.25 | 0.2345 |
2004q1 | 1.00 | 1.6692 | 2.25 | 1.3993 | 2.00 | 1.7832 | 3.91 | 1.1368 | 2.61 | -0.7691 | 0.25 | 0.3042 |
2004q2 | 1.00 | 1.9163 | 2.00 | 1.3973 | 2.00 | 1.8685 | 4.22 | 1.0606 | 2.03 | -1.0114 | 0.32 | 0.8293 |
2004q3 | 1.42 | 1.9725 | 2.25 | 1.3634 | 2.00 | 1.8880 | 4.65 | 1.0591 | 2.00 | -0.8532 | 0.57 | 0.9062 |
2004q4 | 1.94 | 2.0929 | 2.50 | 1.2041 | 2.00 | 1.8828 | 4.75 | 1.1217 | 2.00 | -0.7963 | 0.73 | 1.2905 |
2005q1 | 2.44 | 2.1916 | 2.50 | 1.4171 | 2.00 | 1.5471 | 4.75 | 1.2602 | 2.00 | 0.1699 | 0.75 | 1.3022 |
2005q2 | 2.91 | 2.1165 | 2.50 | 1.2998 | 2.00 | 1.4492 | 4.75 | 1.5234 | 1.95 | 0.0101 | 0.76 | 0.9447 |
2005q3 | 3.42 | 2.0717 | 2.75 | 1.3245 | 2.00 | 1.2961 | 4.59 | 1.7579 | 1.50 | -0.4031 | 0.76 | 0.7091 |
2005q4 | 3.97 | 2.2600 | 3.25 | 1.3851 | 2.07 | 1.3617 | 4.50 | 1.4790 | 1.50 | -0.2729 | 0.93 | 0.6699 |
2006q1 | 4.43 | 2.1283 | 3.75 | 1.1410 | 2.34 | 1.2645 | 4.50 | 1.2782 | 1.78 | 0.0254 | 1.11 | 0.6413 |
2006q2 | 4.90 | 2.2716 | 4.25 | 1.2221 | 2.57 | 1.4385 | 4.50 | 1.1670 | 2.03 | 0.2741 | 1.40 | 0.7943 |
2006q3 | 5.25 | 2.3936 | 4.25 | 1.1755 | 2.91 | 1.4428 | 4.66 | 1.1296 | 2.32 | 0.8427 | 1.63 | 0.8472 |
2006q4 | 5.25 | 2.1577 | 4.25 | 1.5505 | 3.29 | 1.5386 | 4.89 | 1.6231 | 2.69 | 0.8560 | 1.92 | 0.7006 |
2007q1 | 5.25 | 2.3628 | 4.25 | 1.8476 | 3.57 | 1.8266 | 5.22 | 1.8266 | 3.11 | 2.0045 | 2.21 | 0.2990 |
2007q2 | 5.25 | 2.0362 | 4.25 | 2.1193 | 3.82 | 1.9170 | 5.40 | 1.9117 | 3.26 | 2.8956 | 2.43 | 0.5810 |
2007q3 | 5.18 | 1.9906 | 4.50 | 2.4638 | 4.00 | 1.8887 | 5.74 | 1.6097 | 3.55 | 3.7190 | 2.78 | 0.7985 |
2007q4 | 4.52 | 2.2482 | 4.25 | 1.7303 | 4.00 | 1.9096 | 5.69 | 1.4342 | 3.91 | 4.1387 | 2.77 | 0.9732 |
2008q1 | 3.22 | 2.1117 | 3.50 | 1.0914 | 4.00 | 1.8656 | 5.36 | 1.2068 | 4.11 | 1.9496 | 2.75 | 1.3337 |
2008q2 | 2.08 | 2.2659 | 3.00 | 0.8945 | 4.00 | 1.7586 | 5.03 | 1.5200 | 4.25 | 1.6576 | 2.82 | 1.3859 |
2008q3 | 2.00 | 2.2260 | 3.00 | 0.7404 | 4.24 | 1.8634 | 5.00 | 2.0692 | 4.53 | 0.8726 | 2.77 | 1.5008 |
2008q4 | 1.23 | 1.6417 | 1.50 | 1.5322 | 3.28 | 1.9186 | 3.37 | 1.6710 | 3.65 | 0.6194 | 1.99 | 1.4990 |
2009q1 | 0.13 | 1.1791 | 0.50 | 1.8374 | 1.92 | 1.6073 | 1.07 | 1.5147 | 1.52 | 0.3266 | 0.50 | 1.2998 |
2009q2 | 0.13 | 1.1621 | 0.25 | 2.0358 | 1.10 | 1.5826 | 0.50 | 1.5929 | 0.61 | -0.7938 | 0.40 | 1.0328 |
2009q3 | 0.13 | 0.9904 | 0.25 | 1.7635 | 1.00 | 1.2786 | 0.50 | 1.7422 | 0.27 | -0.5638 | 0.34 | 0.9142 |
2009q4 | 0.13 | 1.4156 | 0.25 | 1.1220 | 1.00 | 1.0981 | 0.50 | 2.2124 | 0.25 | -0.6924 | 0.26 | 0.7874 |
2010q1 | 0.13 | 1.5539 | 0.25 | 1.2517 | 1.00 | 0.8760 | 0.50 | 3.0159 | 0.25 | -1.4654 | 0.25 | 0.5340 |
2010q2 | 0.13 | 1.3290 | 0.50 | 1.0859 | 1.00 | 0.9129 | 0.50 | 3.0417 | 0.25 | -0.1921 | 0.18 | 0.2506 |
2010q3 | 0.13 | 1.2923 | 1.00 | 1.4076 | 1.00 | 1.0250 | 0.50 | 2.6774 | 0.55 | 0.0568 | 0.16 | -0.0101 |
2010q4 | 0.13 | 0.9707 | 1.00 | 1.5938 | 1.00 | 1.0861 | 0.50 | 2.7829 | 0.95 | 0.0188 | 0.17 | -0.0777 |
2011q1 | 0.13 | 1.0544 | 1.00 | 1.5169 | 1.00 | 1.1059 | 0.50 | 3.2049 | 1.38 | 1.7838 | 0.17 | 0.5010 |
2011q2 | 0.13 | 1.3995 | 1.00 | 1.4464 | 1.23 | 1.5346 | 0.50 | 3.2563 | 1.68 | 2.2421 | 0.18 | 0.2718 |
2011q3 | 0.13 | 1.6613 | 1.00 | 1.3205 | 1.49 | 1.3362 | 0.50 | 3.2444 | 1.99 | 2.6856 | 0.08 | 0.3921 |
2011q4 | 0.13 | 1.8617 | 1.00 | 1.4475 | 1.28 | 1.5995 | 0.50 | 3.1889 | 1.97 | 2.9649 | 0.04 | -0.6646 |
2012q1 | 0.13 | 2.0858 | 1.00 | 1.5238 | 1.00 | 1.5478 | 0.50 | 2.5082 | 1.64 | 1.7560 | 0.08 | -1.0684 |
2012q2 | 0.13 | 1.9456 | 1.00 | 1.7917 | 1.00 | 1.5661 | 0.50 | 2.1515 | 1.50 | 1.1785 | 0.11 | -1.0920 |
2012q3 | 0.13 | 1.7476 | 1.00 | 1.1719 | 0.76 | 1.5751 | 0.50 | 2.1439 | 1.45 | 0.3309 | 0.06 | -0.9356 |
2012q4 | 0.13 | 1.7784 | 1.00 | 0.9373 | 0.75 | 1.4595 | 0.50 | 2.5365 | 1.23 | -0.7141 | 0.03 | -0.6093 |
2013q1 | 0.13 | 1.6503 | 1.00 | 0.9473 | 0.75 | 1.3661 | 0.50 | 2.2721 | 1.00 | 0.6421 | 0.02 | -0.4152 |
2013q2 | 0.13 | 1.4829 | 1.00 | 0.6178 | 0.59 | 1.1048 | 0.50 | 2.1639 | 1.00 | 0.2146 | 0.02 | -0.3449 |
2013q3 | 0.13 | 1.5213 | 1.00 | 0.9264 | 0.50 | 1.0668 | 0.50 | 2.0414 | 1.00 | 0.1091 | 0.02 | -0.1291 |
2013q4 | 0.13 | 1.5100 | 1.00 | 0.8235 | 0.36 | 0.8309 | 0.50 | 1.7344 | 0.98 | 0.5758 | 0.02 | -0.0011 |
2014q1 | 0.13 | 1.4317 | 1.00 | 1.0730 | 0.25 | 0.8404 | 0.50 | 1.6520 | 0.75 | 0.6341 | 0.02 | -0.0653 |
2014q2 | 0.13 | 1.6205 | 1.00 | 1.3236 | 0.22 | 0.8144 | 0.50 | 1.8638 | 0.75 | 0.6466 | 0.01 | -0.0823 |
2014q3 | 0.13 | 1.6187 | 1.00 | 1.7422 | 0.12 | 0.8266 | 0.50 | 1.7752 | 0.30 | 0.5379 | 0.01 | -0.0470 |
2014q4 | 0.13 | 1.4436 | 1.00 | 2.1087 | 0.05 | 0.7148 | 0.50 | 1.3136 | 0.08 | 0.7800 | -0.00 | 0.0909 |
2015q1 | 0.13 | 1.3267 | 0.75 | 2.4529 | 0.05 | 0.6608 | 0.50 | 1.2328 | -0.06 | 0.9252 | -0.72 | 0.0263 |
2015q2 | 0.13 | 1.2933 | 0.75 | 2.4327 | 0.05 | 0.7784 | 0.50 | 0.8317 | -0.25 | 0.4947 | -0.79 | -0.4354 |
Figure F.2: Average Inflation Rates Away From the Lower Bound with Alternative Starting Dates
Time | US, Average Core Inflation non-ELB era (w/ alternating start dates) | US, Standard Error (Average Core Inflation) | Canada, Average Core Inflation non-ELB era (w/ alternating start dates) | Canada, Standard Error (Average Core Inflation) | Euro Area (19 countries), Average Core Inflation non-ELB era (w/ alternating start dates) | Euro Area (19 countries), Standard Error (Average Core Inflation) | United Kingdom, Average Core Inflation non-ELB era (w/ alternating start dates) | United Kingdom, Standard Error (Average Core Inflation) | Sweden, Average Core Inflation non-ELB era (w/ alternating start dates) | Sweden, Standard Error (Average Core Inflation) | Switzerland, Average Core Inflation non-ELB era (w/ alternating start dates) | Switzerland, Standard Error (Average Core Inflation) |
---|---|---|---|---|---|---|---|---|---|---|---|---|
1995q1 | 1.8295 | 0.0447 | 1.6402 | 0.0765 | 1.4778 | 0.0988 | 0.7831 | 0.1392 | 0.8572 | 0.0753 | ||
1995q2 | 1.8216 | 0.0448 | 1.6448 | 0.0774 | 1.4485 | 0.0961 | 0.7589 | 0.1389 | 0.8489 | 0.0757 | ||
1995q3 | 1.8152 | 0.0452 | 1.6339 | 0.0776 | 1.4120 | 0.0905 | 0.7316 | 0.1381 | 0.8272 | 0.0744 | ||
1995q4 | 1.8102 | 0.0457 | 1.6212 | 0.0774 | 1.3694 | 0.0814 | 0.7029 | 0.1370 | 0.7998 | 0.0719 | ||
1996q1 | 1.8052 | 0.0464 | 1.6127 | 0.0781 | 1.3380 | 0.0765 | 0.6752 | 0.1361 | 0.7712 | 0.0691 | ||
1996q2 | 1.8023 | 0.0472 | 1.6120 | 0.0797 | 1.3136 | 0.0739 | 0.6472 | 0.1351 | 0.7592 | 0.0691 | ||
1996q3 | 1.8014 | 0.0481 | 1.6140 | 0.0811 | 1.3017 | 0.0744 | 0.6306 | 0.1359 | 0.7572 | 0.0699 | ||
1996q4 | 1.8006 | 0.0491 | 1.6171 | 0.0825 | 1.2928 | 0.0754 | 0.6296 | 0.1378 | 0.7575 | 0.0708 | ||
1997q1 | 1.7985 | 0.0501 | 1.6185 | 0.0841 | 1.2690 | 0.0730 | 0.6413 | 0.1393 | 0.7601 | 0.0718 | ||
1997q2 | 1.7965 | 0.0511 | 1.6166 | 0.0859 | 1.2533 | 0.0728 | 0.6715 | 0.1385 | 0.7642 | 0.0728 | ||
1997q3 | 1.7934 | 0.0522 | 1.6135 | 0.0877 | 1.2414 | 0.0733 | 0.6931 | 0.1391 | 0.7698 | 0.0739 | ||
1997q4 | 1.7953 | 0.0533 | 1.6136 | 0.0896 | 1.2290 | 0.0739 | 0.7061 | 0.1406 | 0.7812 | 0.0749 | ||
1998q1 | 1.8031 | 0.0539 | 1.6191 | 0.0911 | 1.2164 | 0.0744 | 0.7055 | 0.1427 | 0.7966 | 0.0757 | ||
1998q2 | 1.8139 | 0.0541 | 1.6216 | 0.0929 | 1.2057 | 0.0753 | 0.7119 | 0.1447 | 0.8150 | 0.0765 | ||
1998q3 | 1.8304 | 0.0527 | 1.6274 | 0.0945 | 1.1957 | 0.0764 | 0.7254 | 0.1465 | 0.8328 | 0.0773 | ||
1998q4 | 1.8446 | 0.0520 | 1.6317 | 0.0963 | 1.1922 | 0.0782 | 0.7451 | 0.1477 | 0.8468 | 0.0784 | ||
1999q1 | 1.8597 | 0.0511 | 1.6333 | 0.0986 | 1.5371 | 0.0532 | 1.1914 | 0.0801 | 0.7756 | 0.1474 | 0.8603 | 0.0796 |
1999q2 | 1.8744 | 0.0502 | 1.6447 | 0.0989 | 1.5403 | 0.0541 | 1.1959 | 0.0820 | 0.7863 | 0.1495 | 0.8668 | 0.0808 |
1999q3 | 1.8897 | 0.0491 | 1.6468 | 0.1013 | 1.5469 | 0.0546 | 1.2064 | 0.0835 | 0.7932 | 0.1518 | 0.8688 | 0.0821 |
1999q4 | 1.9059 | 0.0476 | 1.6451 | 0.1040 | 1.5547 | 0.0550 | 1.2212 | 0.0843 | 0.7931 | 0.1543 | 0.8667 | 0.0832 |
2000q1 | 1.9189 | 0.0471 | 1.6440 | 0.1068 | 1.5642 | 0.0551 | 1.2446 | 0.0832 | 0.7901 | 0.1569 | 0.8592 | 0.0840 |
2000q2 | 1.9260 | 0.0479 | 1.6428 | 0.1098 | 1.5745 | 0.0552 | 1.2762 | 0.0792 | 0.8111 | 0.1585 | 0.8445 | 0.0842 |
2000q3 | 1.9331 | 0.0488 | 1.6448 | 0.1128 | 1.5857 | 0.0550 | 1.3127 | 0.0723 | 0.8322 | 0.1601 | 0.8344 | 0.0848 |
2000q4 | 1.9370 | 0.0501 | 1.6456 | 0.1160 | 1.5977 | 0.0547 | 1.3513 | 0.0630 | 0.8551 | 0.1617 | 0.8305 | 0.0859 |
Four panels in this figure show how the unconditional averages (shown by the dashed black lines) and unconditional standard deviations (shown by the solid black lines) of the model's key variables (inflation, output gap, policy rate, and the expected duration of the ELB episode in top-left, top-right, bottom-left, and bottom-right panels, respectively) vary with the degree of price indexation (which is on x-axis).
In the top-left panel, the black line shows how the risky steady-state inflation varies with the degree of price indexation (which is on x-axis). In the top-right panel, the black line shows how the risky steady-state output gap varies with the degree of price indexation (which is on x-axis). In the bottom-left panel, the black line shows how the risky steady-state policy rate varies with the degree of price indexation (which is on x-axis).
In the bottom-right panel, the solid black and red lines show how the ELB frequency and the standard deviation of the demand shock vary with the degree of price indexation (which is on x-axis), respectively.
Four panels in this figure show how the unconditional averages (shown by the dashed black lines) and unconditional standard deviations (shown by the solid black lines) of the model's key variables (inflation, output gap, policy rate, and the expected duration of the ELB episode in top-left, top-right, bottom-left, and bottom-right panels, respectively) vary with the degree of wage indexation (which is on x-axis).
In the top-left panel, the black line shows how the risky steady-state inflation varies with the degree of wage indexation (which is on x-axis). In the top-right panel, the black line shows how the risky steady-state output gap varies with the degree of wage indexation (which is on x-axis). In the bottom-left panel, the black line shows how the risky steady-state policy rate varies with the degree of wage indexation (which is on x-axis).
In the bottom-right panel, the solid black and red lines show how the ELB frequency and the standard deviation of the demand shock vary with the degree of wage indexation (which is on x-axis), respectively.
This histogram shows the unconditional distribution of inflation from the perfect-foresight version of the stylized Model. Dashed black, solid black, and solid red verical lines are for the inflation target, the risky steady-state inflation, and the average inflation.
Black, red, and blue lines in the left panel show how the conditional average of inflation away from the ELB, the unconditional average inflation, and the risky steady-state inflation, vary with the probability of being at the ELB, respectively, in the perfect-foresight version of the stylized model. The dashed black line in the right panel shows how the conditional average of inflation at the ELB vary with the probability of being at the ELB.