Monetary policy in a low (or negative) interest rates environment with a focus on bank heterogeneity: theory and evidence

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The main objective of this project is to advance theory and use of "big data" to obtain a betterunderstanding of monetary policy transmission via the banking system, especially in a lowinterest rate environment. The UK, like many advanced economies, have remained, since thefinancial crisis a decade ago, in a prolonged period of low interest rates, despite strong monetarystimulus by central banks. This raises the question whether further lowering of policy rates isbeneficial for macroeconomic outcomes, a question that cannot be answered by traditionalmacroeconomic approaches.With this project, we want to address this issue with two novel approaches: 1) by developing newmodels that can capture relevant heterogeneity and nonlinearities; and 2) by exploiting big datafrom the UK financial sector and high-frequency monetary policy identification to develop newand different approaches to empirically analyse the transmission of monetary policy in a lowinterest rate environment.