01835cas a2200265 a 4500 AALejournalIMF017526 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475588224 1018-5941 BD-DhAAL BD-DhAAL Grisse, Christian. Lower Bound Beliefs and Long-Term Interest Rates / Christian Grisse, Signe Krogstrup, Silvio Schumacher. Washington, D.C. : International Monetary Fund, 2017. 1 online resource (40 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We study the transmission of changes in the believed location of the lower bound to longterm interest rates since the introduction of negative interest rate policies. The expectations hypothesis of the term structure combined with a lower bound on policy rates suggests that normal policy transmission is reduced when policy rates approach this lower bound. We show that if market participants revise downward the believed location of the lower bound, this may in itself reduce long-term yields. Moreover, normal policy transmission to long-term rates increases. A cross-country event study suggests that such effects have been empirically relevant during the recent negative interest rate episode. Mode of access: Internet Krogstrup, Signe. Schumacher, Silvio. IMF Working Papers; Working Paper ; No. 2017/062 Full text available on IMF http://elibrary.imf.org/view/journals/001/2017/062/001.2017.issue-062-en.xml IMF e-Library