This association with late Dr. Patel, of releasing his book, posthumously – vicarious, as it may be – is therefore very special for me. OUP I want to thank Oxford University Press for giving me this privilege. Ms. Alaknanda Patel Those of you who have known Mrs. Alaknanda Patel will, of course, relive some memories, through interaction with her today.
It is well known that in standard macroeconomic models, macroeconomic variables respond strongly to forward guidance by the central bank, giving rise to substantial policy effects. Thus, from a theoretical perspective, a commitment to continuing with zero interest rates for a prolonged period not only allows borrowing unlimited monetary easing effects from the future, but such policy effects also materialize immediately.