Research Discussion Paper – RDP 2011-02 Long-term Interest Rates, Risk Premia and Unconventional Monetary Policy

Contents

• Introduction
• Model
• Equilibrium Determinacy
• Dynamics
• Optimal Monetary Policy Rules
• Announcements and Transitions
• Conclusions
• Appendix A: The Linearised Equations
• Appendix B: Calibration
• Appendix C: Anticipated Structural Changes Under Rational Expectations
• References

We thank Adam Cagliarini, Richard Finlay, Jonathan Kearns, Philip Lowe, Michael Plumb and Ken West for useful discussions. The views expressed here are our own and do not necessarily reflect those of the Reserve Bank of Australia.