Banca d’Italia and SUERF Workshop

The effectiveness of monetary policy in a low interest rate environment

Monetary policies worldwide are currently facing a number of challenges, including how to deal with the low level of nominal and real interest rates, how to deal with a persistent undershooting of inflation targets, how to align inflation expectations with the inflation target, how to deal with a changing inflation formation process, and how to gauge changes in the transmission of monetary policy impulses to the economy and inflation. Where actually is the effective lower bound of interest rates? How to incorporate unconventional policy tools such as outright asset purchases and forward guidance in the measurement of the policy stance and in the assessment of remaining policy scope? What do equilibrium and policy rates close to the effective lower bound imply for optimal monetary policy strategies, including the definition of price stability or the inflation aim? How has the post-crisis monetary policy toolbox performed; how should it develop further in the future? These and other topics are currently also reflected upon in global central banks’ ongoing monetary policy strategy reviews. The workshop will address several of these issues, combining insights from cutting edge academic research and policy makers’ practical experiences.

Scientific committee:
Jakob De Haan, SUERF President
Ernest Gnan, OeNB and SUERF Secretary General
Giuseppe Grande, Banca d"Italia
Mario Pietrunti, Banca d"Italia
Stefano Siviero, Banca d"Italia
Frank Smets, ECB and SUERF Fellow

Format: Online Workshop
SUERF gratefully acknowledges professional technical support of SUERF online events by the OeNB’s Information Management and Services Division.

Date and Time
Wednesday, 18 November 2020 - 14:00-16:20 CET
Thursday, 19 November 2020 - 14:00-16:35 CET

Programme

Wednesday, 18 November 2020
14:00	Welcome address

	Daniele Franco, Senior Deputy Governor, Bank of Italy

14:20	Keynote Lecture

	*Should the ECB Adjust its Strategy in the Face of a Lower r?** Jordi Galí, CREI, Universitat Pompeu Fabra, Barcelona GSE Presentation by Jordi Galí

15:05	Session 1 - Strategy

	Chair: Ernest Gnan, Counsel to the Board and Head, Economic Analysis Division, OeNB I SUERF Secretary General Paper 1 - Hitting the Elusive Inflation Target Leonardo Melosi, EUI, Chicago Fed, CEPR, (paper with Francesco Bianchi and Mathias Rottner) Discussant: Flora Budianto, Economist, BIS - Presentation Presentation by Leonardo Melosi Paper 2 - Expectations-Driven Liquidity Traps: Implications for Monetary and Fiscal Policy Sebastian Schmidt, Economist, ECB (paper with Taisuke Nakata) Discussant: Juan Passadore, Assistant Professor, EIEF - Presentation Presentation by Sebastian Schmidt

16:05	Q&A

16:15	Wrap up of the Day 1 and Close

Thursday, 19 November 2020
14:00	Welcome

14:05	Session 2: Structural Change/Transmission

	Chair: Frank Smets, Director General Economics, European Central Bank I SUERF Fellow Paper 3 - Corporate Leverage and Monetary Policy Effectiveness in the Euro Area Martina Cecioni, Banca d’Italia, (paper with Simone Auer and Marco Bernardini) Discussant: Carlo Altavilla, Head of Section, European Central Bank - Presentation Presentation by Martina Cecioni Paper 4 - Bank intermediation activity in a low interest rate environment Leonardo Gambacorta, Head, Innovation and the Digital Economy, BIS (paper with Michael Brei and Claudio Borio) Discussant: Luisa Corrado, Professor of Economics, University of Rome Tor Vergata - Presentation Presentation by Leonardo Gambacorta

14:55	Q&A

15:15	Break

15:20	Session 3: Tools/Instruments

	Chair: Stefano Siviero, Deputy Director General for Markets and Payment Systems, Bank of Italy Paper 5 - Monetary policy options in a ‘low for long’ era Richard Harrison, Bank of England, (paper with Martin Seneca and Matt Waldron) Discussant: Andreas Tischbirek, Assistant Professor of Economics, HEC Lausanne - Presentation Presentation by Richard Harrison Paper 6 - On the negatives of negative interest rates and the positives of exemption thresholds Romina Ruprecht, University of Basel, (paper with Aleksander Berentsen, University of Basel and FRB St. Louis, and Hugo van Buggenum, Tilburg University) Discussant: Kilian Rieder, Research Economist at the Oesterreichische Nationalbank - Presentation Presentation by Romina Ruprecht

16:20	Q&A

16:30	Wrap up of the Day 2 and Close

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The effectiveness of monetary policy in a low interest rate environment