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Monetary policy has significant but overlooked effects on entry and exit of firms. We study optimal monetary stabilization policy in a DSGE model with microfounded money demand and endogenous firm entry. Due to a congestion externality affecting firm entry, the optimal policy deviates from the...
Persistent link: https://www.econbiz.de/10005077874
, it can control inflation expectations and improve welfare by stabilizing short-run shocks to the economy. The optimal …
Persistent link: https://www.econbiz.de/10005077878
We study the use of intermediated assets as media of exchange in a neo- classical growth model. An intermediary is delegated control over productive capital and finances itself by issuing claims against the revenue generated by its operations. Unlike physical capital, intermediated claims are...
Persistent link: https://www.econbiz.de/10010705757
An increasing number of central banks implement monetary policy via two standing facilities: a lending facility and a deposit facility. In this paper we show that it is socially optimal to implement a non-zero interest rate spread. We prove this result in a dynamic general equilibrium model...
Persistent link: https://www.econbiz.de/10008690980