Volume 17, Number 2 June 2021 oue1,Nme June 2021 Volume 17, Number 2 INTERNATIONAL JOURNAL OF CENTRAL BANKING

INTERNATIONAL JOURNAL OF CENTRAL BANKING

Broadening Narrow Money: with a Digital Currency Jack Meaning, Ben Dyson, James Barker, and Emily Clayton Population Aging and the Macroeconomy Noëmie Lisack, Rana Sajedi, and Gregory Thwaites Central Bank Communication and Disagreement about the Natural Rate Hypothesis Carola Conces Binder What Does “Below, but Close to, 2 Percent” Mean? Assessing the ECB’s Reaction Function with Real-Time Data Maritta Paloviita, Markus Haavio, Pirkka Jalasjoki, and Juha Kilponen Deposit Insurance and Banks’ Deposit Rates: Evidence from the 2009 EU Policy Matteo Gatti and Tommaso Oliviero “Unconventional” Monetary Policy as Conventional Monetary Policy: A Perspective from the United States in the 1920s Mark Carlson and Burcu Duygan-Bump Policy and Macro Signals from Central Bank Announcements Paul Hubert and Becky Maule Optimal Monetary Policy in Small Open Economies: Producer-Currency Pricing Mikhail Dmitriev and Jonathan Hoddenbagh International Journal of Central Banking

Volume 17, Number 2 June 2021

Broadening Narrow Money: Monetary Policy with a Central Bank 1 Digital Currency Jack Meaning, Ben Dyson, James Barker, and Emily Clayton

Population Aging and the Macroeconomy 43 No¨emie Lisack, Rana Sajedi, and Gregory Thwaites

Central Bank Communication and Disagreement about the Natural 81 Rate Hypothesis Carola Conces Binder

What Does “Below, but Close to, 2 Percent” Mean? Assessing the 125 ECB’s Reaction Function with Real-Time Data Maritta Paloviita, Markus Haavio, Pirkka Jalasjoki, and Juha Kilponen

Deposit Insurance and Banks’ Deposit Rates: Evidence from the 2009 171 EU Policy Matteo Gatti and Tommaso Oliviero

“Unconventional” Monetary Policy as Conventional Monetary Policy: 207 A Perspective from the United States in the 1920s Mark Carlson and Burcu Duygan-Bump

Policy and Macro Signals from Central Bank Announcements 255 Paul Hubert and Becky Maule

Optimal Monetary Policy in Small Open Economies: 297 Producer-Currency Pricing Mikhail Dmitriev and Jonathan Hoddenbagh

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ISSN: 1815-4654 International Journal of Central Banking

Board of Directors Chairman Richard Clarida, Federal Reserve Board

Board Members Elias Albagli, Central Bank of Chile Andre Minella, Central Bank of Brazil Ahmed Alkholifey, Saudi Arabian Monetary Authority Emanuel M¨onch, David E. Altig, Federal Reserve Bank of Atlanta Gerard O’Reilly, Central Jan Marc Berk, The Nederlandsche Bank Eva Ortega, Claudio Borio, Bank for International Settlements Michael D. Patra, Jan Bruha, Anna Paulson, Federal Reserve Bank of Chicago Paul Castillo, Central Reserve Bank of Peru Th´orarinn G. P´etursson, Central Bank of Lillian Cheung, Hong Kong Monetary Authority Iceland Laurent Clerc, Sigal Ribon, Bank of Israel Andrew Colquhoun, Monetary Authority of Singapore Kasper Roszbach, Norges Bank Francisco G. Dakila Jr., Bangko Sentral ng Pilipinas Glenn Rudebusch, Federal Reserve Bank of San Troy Davig, Federal Reserve Bank of Kansas City Francisco Michael Dotsey, Federal Reserve Bank of Philadelphia Krislert Samphantharak, Bank of Thailand Luci Ellis, Reserve Bank of Australia C¸a˘grı Sarıkaya, Central Bank of Turkey Rosthom Fadli, Bank of Algeria Lawrence Schembri, Bank of Canada Eugenio Gaiotti, Banca d’Italia Woon Shin, Bank of Korea Yong Ha, Reserve Bank of New Zealand Ulf S¨oderstr¨om, Philipp Hartmann, European Central Bank Ellis Tallman, Federal Reserve Bank of Cleveland Jonathan Heathcote, Federal Reserve Bank of George Tavlas, Minneapolis Geoff Tootell, Federal Reserve Bank of Boston Beverly Hirtle, Federal Reserve Bank of New York Dobieslaw Tymoczko, Elena Iorga, Hernando Vargas Herrera, Banco de la Rep´ublica Esa Jokivuolle, Christopher Waller, Federal Reserve Bank of Signe Krogstrup, St. Louis Michael Kumhof, John Weinberg, Federal Reserve Bank of Thomas Laubach, Federal Reserve Board Richmond Ana Christina Leal, Bank of Portugal Rafael Wouters, Carlos Lenz, Swiss National Bank Mine Y¨ucel, Federal Reserve Bank of Dallas Ye Liu, People’s Bank of China Ksenia Yudaeva, Central Bank of Russian Ken Matsushita, Bank of Japan Federation Editorial Board Managing Editor Luc Laeven European Central Bank

Co-editors Klaus Adam Linda S. Goldberg Keith Kuester University of Mannheim Federal Reserve Bank of University of Bonn New York Tobias Adrian Elena Loutskina International Monetary Fund Oscar` Jord`a UVA Darden School of Federal Reserve Bank of Business Boragan Aruoba San Francisco University of Maryland Steven Ongena Sharon Kozicki University of Zurich Huberto Ennis Bank of Canada Federal Reserve Bank of Richmond Associate Editors Patrick Bolton Darrell Duffie Francesco Lippi Columbia University Stanford University LUISS University Michael D. Bordo Jordi Gal´ı Carmen M. Reinhart Rutgers University Centre de Recerca en Economia Harvard Kennedy School Mark Carey Internacional (CREI) H´el`ene Rey Federal Reserve Board Marvin Goodfriend London Business School Pierre Collin-Dufresne Carnegie Mellon University Jean-Charles Rochet Ecole´ Polytechnique F´ed´erale Michael B. Gordy University of Zurich de Lausanne Federal Reserve Board Andrew K. Rose Guy Debelle Luigi Guiso University of California, Reserve Bank of Australia Einaudi Institute Berkeley Douglas W. Diamond Andrew G. Haldane Lars E.O. Svensson Bank of England Stockholm School of Economics Graduate School of Business Takatoshi Ito J¨urgen von Hagen Francis Diebold Columbia University University of Bonn University of Pennsylvania David Lando Ernst-Ludwig von Thadden Michael Dotsey Business School University of Mannheim Federal Reserve Bank of Philip Lane Tsutomu Watanabe Philadelphia European Central Bank University of Tokyo

Advisory Board Franklin Allen Hyun Song Shin Kazuo Ueda Imperial College London Bank for International University of Tokyo Charles Goodhart Settlements Carl E. Walsh London School of Economics John Taylor University of California Stanford University Michael Woodford Columbia University