Research Seminar with Vlad Semerikov

During the seminar V. Semerikov presented the most widely discussed and original causes of why interest rates in major developed economies remain extremely low for so long period of time. It was underlined that in modern literature there is no unified consensus about possible causes of that phenomenon.

At the same time, it is quite clear what consequences do low interest rates provoke for the economy in general and, particularly, for the ability of central banks to maintain price and financial stability. General opinion is that in low-interest rate environment central banks cannot achieve both or any of that by just exploiting traditional monetary policy framework (for example, based on Taylor-rule principle). Besides different unconventional monetary tools other alternatives for central banks are also widely discussed. For example, that alternatives include gradual transition from inflation targeting framework to price-level targeting. However, potential effectiveness of such approaches to monetary policy is still unclear and highly depends on economic agents’ trust and confidence in central banks.