Showing 1 - 10 of 220
Persistent link: https://www.econbiz.de/10012177384
We analyze optimal monetary policy and its implications for asset prices, when aggregate demand has inertia and responds to asset prices with a lag. If there is a negative output gap, the central bank optimally overshoots aggregate asset prices (asset prices are initially pushed above their...
Persistent link: https://www.econbiz.de/10013093040
Persistent link: https://www.econbiz.de/10014331559
Persistent link: https://www.econbiz.de/10015419371
Persistent link: https://www.econbiz.de/10012179375
Persistent link: https://www.econbiz.de/10001603482
Persistent link: https://www.econbiz.de/10001603814
Persistent link: https://www.econbiz.de/10001672837
Global risk-off shocks can be highly destabilizing for financial markets and, absent an adequate policy response, may trigger severe recessions. Policy responses were more complex for developed economies with very low interest rates after the Global Financial Crisis (GFC). We document, however,...
Persistent link: https://www.econbiz.de/10012890990
Emerging economies are prone to crises triggered by external shocks. During these crises, should the central bank stabilize the currency or domestic interest rates? If the choice is outside the central bank's control, as in a currency board, are there good policy substitutes? We argue that these...
Persistent link: https://www.econbiz.de/10013219686