CONSUMER CREDIT, LIQUIDITY, AND THE TRANSMISSION MECHANISM OF MONETARY POLICY
نویسندگان
چکیده
منابع مشابه
Liquidity, Credit Frictions, and Optimal Monetary Policy
We study optimal monetary policy in a NewMonetarist framework with banking, private liquidity, and credit frictions.We show that whenever part of the decentralized transactions are allowed to use deposit claims backed by interest-bearing assets, the optimal policy is a non-Friedman-rule liquidity trap. In contrast, the Friedman rule is optimal if there are no credit frictions, or if the economy...
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In recent years there has been a resurgence of research on the transmission of monetary policy through the financial system, fueled in part by empirical findings showing that monetary policy affects asset prices and the financial system in ways not explained by the New Keynesian paradigm. In particular, monetary policy appears to impact risk premia in stock and bond prices, and to effectively c...
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The paper models the interaction between risk taking in the financial sector and central bank policy for the case of pure illiquidity risk. It is shown that, when bad states are highly unlikely, public provision of liquidity may improve the allocation, even though it encourages more risk taking (less liquid investment) by private banks. In general, however, there is an incentive of financial in...
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ژورنال
عنوان ژورنال: Economic Inquiry
سال: 2011
ISSN: 0095-2583
DOI: 10.1111/j.1465-7295.2010.00297.x