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Today's Must-Must-Read: Charles Evans et al.: Risk Management for Monetary Policy Near the Zero Lower Bound - Washington Center for Equitable Growth
Near the zero lower bound, monetary policy tools are strongly asymmetric and can deal with the second scenario much more easily than with the first. We… provide a quantitative evaluation of this…. Finally, we present narratives from Federal Reserve communications that suggest risk management is a longstanding practice, and econometric evidence that the Federal Reserve historically has responded to uncertainty, as measured by a variety of indicators.