Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
We quantify the macroeconomic effects of interest rate forward guidance in an estimated medium-scale Two-Agent New Keynesian (TANK) model. Although TANK models can in principle dampen or amplify the power of forward guidance compared to a representative agent model, our estimates indicate a dampening, as there is sufficient countercyclical redistribution. An interaction of forward guidance with asset purchases gives rise to non-linear effects that depend on the horizon of the interest rate peg.