Author: Vasco CúrdiaPublisher:
ISBN:
Category : Credit
Languages : en
Pages : 82
Book Description
Credit Frictions and Optimal Monetary Policy
Author: Vasco CúrdiaCredit Frictions and Optimal Monetary Policy
Author: Credit frictions, housing prices and optimal monetary policy rules
Author: Caterina MendicinoPublisher:
ISBN: 9788879998741
Category : Business & Economics
Languages : it
Pages : 28
Book Description
Optimal Monetary Policy Rulses, Asset Prices an Credit Frictions
Author: Ester FaiaOptimal Monetary Policy Rules, Asset Prices and Credit Frictions
Author: Ester FaiaFinancial Frictions and the Design of Optimal Monetary Policy
Author: Benjamin SchwanebeckPublisher: kassel university press GmbH
ISBN: 3737650594
Category :
Languages : en
Pages : 6
Book Description
The financial crisis proved strikingly that the structure of the financial system and financial frictions play a crucial role for the effectiveness of monetary policy but also for system risk. Policymakers have overlooked financial intermediation and financial stability. Shadow banks and especially in the euro area the interbank market play a crucial role in propagating financial turmoil. This dissertation addresses these circumstances and contributes to the research on the optimal design of macroeconomic policy with a particular focus on monetary unions with heterogeneous financial sectors. As the consequences for monetary policy are at the heart of this thesis, I use state-of-the-art dynamic stochastic general equilibrium models and implement financial intermediation and frictions to analyze the transmission channels and interactions of (optimal) fiscal, monetary, macroprudential as well as unconventional monetary policy.
Financial Frictions and Optimal Monetary Policy in an Open Economy
Author: Marcin KolasaPublisher:
ISBN:
Category :
Languages : en
Pages : 42
Book Description
A growing number of papers have studied positive and normative implications of financial frictions in DSGE models. We contribute to this literature by studying the welfare-based monetary policy in a two-country model characterized by financial frictions, alongside a number of key features, like capital accumulation, non-traded goods and foreign-currency debt denomination. We compare the cooperative Ramsey monetary policy with standard policy benchmarks (e.g. PPI stability) as well as with the optimal Ramsey policy in a currency area. We show that the two-country perspective offers new insights on the trade-offs faced by the monetary authority. Our main results are the following. First, strict PPI targeting (nearly optimal in our model if credit frictions are absent) becomes excessively procyclical in response to positive productivity shocks in the presence of financial frictions. The related welfare losses are non-negligible, especially if financial imperfections interact with non-tradable production. Second, (asymmetric) foreign currency debt denomination affects the optimal monetary policy and has important implications for exchange rate regimes. In particular, the larger the variance of domestic productivity shocks relative to foreign, the closer the PPI-stability policy is to the optimal policy and the farther is the currency union case. Third, we find that central banks should allow for deviations from price stability to offset the effects of balance sheet shocks. Finally, while financial frictions substantially decrease attractiveness of all price targeting regimes, they do not have a significant effect on the performance of a monetary union agreement.
Optimal Monetary Policy and Imperfect Financial Markets
Author: Salem M. Abo-ZaidPublisher:
ISBN:
Category :
Languages : en
Pages : 27
Book Description
This paper studies optimal monetary policy in a model with credit frictions and money demand. We show that augmenting a standard New-Keynesian model with money demand and financial frictions generates a mechanism that, in equilibrium, gives rise to optimal negative nominal interest rates. In addition, we find that the tighter credit markets are, the lower the optimal nominal policy interest rate and the more likely is to be negative. Quantitatively, when credit constraints are binding, a standard calibration of the model generates an optimal nominal policy interest rate that is roughly -4% annually.
Credit Frictions and Optimal Monetary
Author: V. CurdiaOptimal Monetary Policy in a Small Open Economy with Financial Frictions
Author: Rossana MerolaPublisher:
ISBN: 9783865585943
Category :
Languages : en
Pages :
Book Description