Lizarazo, Sandra; Da-Rocha, Jose-Maria - Volkswirtschaftliche Fakultät, … - 2011
the punishment to default less severe. In this context, by affecting money demand, monetary policy can affect incentives … to default; determining optimal monetary policy can then be thought of as equivalent to choosing the optimal default rate …. Since each economy might have a different optimal default rate, each economy might have a different optimal monetary policy …