Alternative Monetary Policy Tools: Funding for Lending and Forward Guidance

The video discusses alternative monetary policy tools, focusing on Funding for Lending and forward guidance. Funding for Lending aims to boost bank lending by providing cheaper funding, encouraging credit creation, and stimulating economic growth. Forward guidance involves central banks communicating future interest rate expectations to influence market behavior. Both tools are crucial in shaping monetary policy and impacting the real economy.

Describe the difference between specific and implied forward guidance.

What are the potential benefits of forward guidance for economic agents?

In what ways do Funding for Lending and forward guidance interact within the monetary policy process?