[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-203346-105":59,"doc-detail-203346-en":130},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":123,"head_meta":125,"extra_data":127,"updated_unix":129},105,"en","monetary-policy-and-real-borrowing-costs-at-the-zero-lower-bound","Monetary Policy and Real Borrowing Costs at the Zero Lower Bound","","This paper evaluates how conventional monetary policy and unconventional measures after the zero lower bound (ZLB) affect real borrowing costs. During the ZLB period, it distinguishes policy surprises using movements in the 2-year Treasury yield around announcements and separate, orthogonal movements in the 10-year yield. The results show that unconventional policy can lower real borrowing costs with an effectiveness comparable to conventional policy, implying full pass-through from Treasury yields to private yields at similar maturities.",{"@graph":69,"@context":122},[70,84,105],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/monetary-policy-and-real-borrowing-costs-at-the-zero-lower-bound/203346/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/monetary-policy-and-real-borrowing-costs-at-the-zero-lower-bound/203346.png","ImageObject",300,407,{"name":92,"@type":93},"Emma Wilson","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-27","2026-09-04",true,{"@type":102,"interactionType":103,"userInteractionCount":44},"InteractionCounter",{"@type":104},"ViewAction",{"@type":106,"mainEntity":107},"FAQPage",[108,114,118],{"name":109,"@type":110,"acceptedAnswer":111},"What does the paper compare regarding monetary policy effects?","Question",{"text":112,"@type":113},"It compares the effects of conventional monetary policy on real borrowing costs with those of unconventional measures used after the policy rate reached the zero lower bound.","Answer",{"name":115,"@type":110,"acceptedAnswer":116},"How does the paper identify policy surprises during the ZLB period?",{"text":117,"@type":113},"It uses changes in the 2-year Treasury yield around policy announcements and changes in the 10-year Treasury yield that are orthogonal to those in the 2-year yield.",{"name":119,"@type":110,"acceptedAnswer":120},"What conclusion does the paper reach about the efficacy of unconventional policy?",{"text":121,"@type":113},"Unconventional policy lowers real borrowing costs with effectiveness comparable to conventional policy, indicating complete pass-through from policy-induced movements in Treasury yields to private yields of comparable maturity.","https://schema.org",{"og:url":83,"og:type":124,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":126,"canonical":83},"index,follow",{"doc_id":128,"site_id":62},203346,1788559954,{"code":4,"msg":5,"data":131},{"doc_id":128,"user_id":132,"nickname":92,"user_avatar":133,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":44,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":139,"language":140,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":67,"update_tm":129,"read_time":144,"preview_page_count":4},3848291630094,"https://eur-avatar.wpscdn.com/davatar_085a072bc5b1113ac321206ff7593b45","Finance and Economics Discussion Series Divisions of Research & Statistics and Monetary A􀀋airs Federal Reserve Board, Washington, D.C .  \nMonetary Policy and Real Borrowing Costs at the Zero Lower  \nBound  \nSimon Gilchrist, David Lopez-Salido, and Egon Zakrajsek  \n2014-03  \nNOTE: Sta􀀋 working papers in the Finance and Economics Discussion Series (FEDS) are preliminary materials circulated to stimulate discussion and critical comment. The analysis and conclusions set forth are those of the authors and do not indicate concurrence by other members of the research sta􀀋 or the Board of Governors. References in publications to the Finance and Economics Discussion Series (other than acknowledgement) should be cleared with the author(s) to protect the tentative character of these papers.  \nMonetary Policy and Real Borrowing Costs at the  \nZero Lower Bound  \nSimon Gilchrist􀀃 David L􀀓opez-Salido† Egon Zakraj􀀔sek‡  \nDecember 19, 2013  \nAbstract  \nThis paper compares the e􀀋ects of conventional monetary policy on real borrowing costs with those of the unconventional measures employed after the target federal funds rate hit the zero lower bound (ZLB) . For the ZLB period, we identify two policy surprises: changes in the 2-year Treasury yield around policy announcements and changes in the 10-year Treasury yield that are orthogonal to those in the 2-year yield. The e􀀎cacy of unconventional policy in lowering real borrowing costs is comparable to that of conventional policy, in that it implies a complete pass-through of policy-induced movements in Treasury yields to comparable-maturity private yields.  \nJEL Classification: E43, E52  \nKeywords: Unconventional monetary policy, LSAPs, forward guidance, term premia, corporate bond yields, mortgage interest rates  \nWe thank Stefania D’Amico, Mark Gertler, Jim Hamilton, John Leahy, Shane Sherlund, Eric Swanson, and Jonathan Wright for very helpful comments and suggestions. Jane Brittingham, Holly Dykstra, and George Fenton provided superb research assistance. The views expressed in this paper are solely the responsibility of the authors and should not be interpreted as re􀀍ecting the views of the Board of Governors of the Federal Reserve System or of anyone else associated with the Federal Reserve System.  \n􀀃 Department of Economics, Boston University and NBER. E-mail: sgilchri@bu .edu †Division of Monetary A􀀋airs, Federal Reserve Board. E-mail: [david.lopez-salido@frb.gov](david.lopez-salido@frb.gov)[ ](david.lopez-salido@frb.gov)‡Division of Monetary A􀀋airs, Federal Reserve Board. E-mail: [egon.zakrajsek@frb.gov](egon.zakrajsek@frb.gov)  \n1 Introduction  \nFor the better part of the past 35 years, the Federal Reserve attempted to achieve its statutory objectives for monetary policy—maximum employment, stable prices, and moderate long-term interest rates—by manipulating short-term nominal interest rates in an e􀀋ort to in􀀍uence the real borrowing costs faced by businesses and households.1 Under this so-called dual mandate, policymakers respond to a slowdown in economic activity by lowering short-term nominal interest rates, thereby inducing a decline in real borrowing costs. According to a textbook description of the monetary transmission mechanism, businesses respond by boosting capital expenditures, while households increase purchases of durable goods and real estate assets, expansionary demand e􀀋ects that then lead to rising employment and output.2  \nThe ability of the Federal Reserve to in􀀍uence real borrowing costs, however, is indirect. Conventional monetary policy works through open market operations, which directly a􀀋ect the overnight federal funds rate. As emphasized by G¨urkaynak, Sack, and Swanson [2005a], policy actions a􀀋ect both the current target rate and its expected future trajectory. Through its in􀀍uenceon expectations, a policy easing lowers interest rates throughout the term structure, and, to the extent that nominal prices do not adjust fully, it also reduces longer-term real inte","cbCaivJRhgjdv1B0","https://ap.wps.com/l/cbCaivJRhgjdv1B0","pdf",689768,38,"English","# Abstract\n# Keywords\n# Introduction","[{\"question\":\"What does the paper compare regarding monetary policy effects?\",\"answer\":\"It compares the effects of conventional monetary policy on real borrowing costs with those of unconventional measures used after the policy rate reached the zero lower bound.\"},{\"question\":\"How does the paper identify policy surprises during the ZLB period?\",\"answer\":\"It uses changes in the 2-year Treasury yield around policy announcements and changes in the 10-year Treasury yield that are orthogonal to those in the 2-year yield.\"},{\"question\":\"What conclusion does the paper reach about the efficacy of unconventional policy?\",\"answer\":\"Unconventional policy lowers real borrowing costs with effectiveness comparable to conventional policy, indicating complete pass-through from policy-induced movements in Treasury yields to private yields of comparable maturity.\"}]","Monetary Policy and Real Borrowing Costs at the Zero Lower Bound | PDF",96]