Central Banks Going Long
This seminar is presented by Professor Ricardo Reis from the London School of Economics
Recent policies by central banks have focused on their effect on long-term interest rates. Historically, central banks have not only focused on long-term interest rates, but sometimes also actively targeted long rates. The speaker will discuss a few of those episodes, and what they entailed. He will then study their implications for the ability of the central bank to control inflation in a standard model of inflation control. Methodologically, the problem of inflation control is set in a continuous time world hit by diffusion shocks.