Monetary Policy under Zero Interest Rate: Viewpoints of Central Bank Economists

Four years after the launch of the euro in January 1999 and while the European Central Bank (ECB) plans a review about its monetary policy strategy, it seems interesting to study the link between monetary policy, the long-term perception of ináation and long-term interest rates. In the European case, it is possible to use the German term structure as a benchmark. But in this case, one feature is puzzling: how the long-term interest rates evolved in link with the expected path of the short-term interest rate, while this latter was under the control of the German monetary authorities until the end of 1998 (and normally depended of German...