Financial Crises, Unconventional Monetary Policy Exit Strategies, and Agents’ Expectations
نویسندگان
چکیده
منابع مشابه
Financial Crises, Unconventional Monetary Policy Exit Strategies, and Agents’ Expectations
This paper studies the implications of exit strategies from unconventional monetary policy. Using a Markov switching DSGE model with financial frictions, agents in the model have rational expectations about the probability of financial crises, the probability of an unconventional response to crises, and the exit strategy used. Selling offassets quickly produces a double-dip recession; in contra...
متن کاملFinancial Crises , Unconventional Monetary Policy Exit Strategies , and Agents ’ Expectations ∗ Andrew
A Markov switching DSGE model with financial frictions investigates the effects of unconventional monetary policy (UMP) exit strategies. Agents in the model have rational expectations about the probability of financial crises, the probability of a UMP response to crises, and the exit strategy used. Selling off assets quickly produces a doubledip recession; in contrast, a slow unwind generates a...
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The financial crisis that surfaced in 2007 has stressed the need to identify the ultimate sources of the incentives that were behind the preceding credit and housing bubbles. To lower the likelihood of future financial collapses, prudent economic policies as well as an adequate regulatory and supervisory framework for financial institutions are required. Monetary policy, in turn, should be dire...
متن کاملFinancial Frictions and Unconventional Monetary Policy in Emerging Economies∗
We analyze conventional and unconventional monetary policies in a dynamic small open-economy model with financial frictions. In the model, financial intermediaries or banks borrow from the world market and lend to domestic households. Banks can borrow abroad up to a multiple of their equity; in turn, there is a limit to how much bank equity households can hold. An economy-wide credit constraint...
متن کاملConventional and Unconventional Monetary Policy
The authors extend a standard New Keynesian model to incorporate heterogeneity in spending opportunities and two sources of (potentially time-varying) credit spreads and to allow a role for the central bank’s balance sheet in equilibrium determination. They use the model to investigate the implications of imperfect financial intermediation for familiar monetary policy prescriptions, and to cons...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2011
ISSN: 1556-5068
DOI: 10.2139/ssrn.1927480