Global central banks' strategic cooperation in forward guidance impacts economic welfare.
The article explores how telling people about future economic policies can affect two countries' economies when interest rates are already at zero. By using a specific method, the researchers found that the type of FG policy can either help or hurt the other country's economy, depending on how willing people are to save money. They also discovered that when both countries work together, they can minimize the negative impact on global welfare by coordinating their FG policies.