This paper examines the stimulative effect of central bank forward guidance—the promise
to keep future policy rates lower than its policy rule suggests—when the short-term nominal
interest rate is stuck at its zero lower bound (ZLB).
This paper provides a general framework for the quantitative analysis of
stochastic dynamic models. We review convergence properties of some
numerical algorithms and available methods to bound approximation errors.
The two channels of default on unsecured consumer debt are (i) bankruptcy, which
legally grants partial or complete removal of unsecured debt under certain circumstances,
and (ii) delinquency, which is informal default via nonpayment.