External Constraints on Monetary Policy and the Financial Accelerator
We develop a small open economy macroeconomic model where financial conditions influence aggregate behavior. We use this model to explore the connection between the exchange rate regime and financial distress. Fixed exchange rates are shown to exacerbate financial crises. Quantitative exercises calibrated to match the Korean experience during the recent Asian crisis are able to replicate key macroeconomic outcomes including the sharp increase in lending rates and the observed drop in output, investment and productivity during the 1997-1998 episode. These exercises imply that welfare losses following a financial crisis are significantly larger under fixed exchange rates relative to flexible exchange rates.On 28-29 March 2003, the BIS held a conference on quot;Monetary stability, financial stability and the business cyclequot;. This event brought together central bankers, academics and market participants to exchange views on this issue (see the conference programme and list of participants in this document). This paper was presented at the conference. Also included in this publication are the comments by the discussants. The views expressed are those of the author(s) and not those of the BIS. The opening speech at the conference by the BIS General Manager and the prepared remarks of the four participants on the policy panel are being published in a single volume in the BIS Papers series
Year of publication: |
[2013]
|
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Authors: | Gertler, Mark |
Other Persons: | Gilchrist, Simon (contributor) ; Natalucci, Fabio M. (contributor) |
Publisher: |
[2013]: [S.l.] : SSRN |
Saved in:
freely available
Extent: | 1 Online-Ressource (61 p) |
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Series: | BIS Working Paper ; No. 139 |
Type of publication: | Book / Working Paper |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments September 2003 erstellt |
Other identifiers: | 10.2139/ssrn.959669 [DOI] |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10012711545
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