Chi, Chun-che; Schmitt-Grohé, Stephanie; Uribe, Martín - National Bureau of Economic Research - 2021
This paper studies optimal capital-control and bank-reserve remuneration policy in an open economy with a banking … obtained in the absence of a banking channel. Under optimal policy, the central bank injects bank reserves during recessions … constraint is placed at the level of the nonfinancial sector as opposed to at the level of the bank …