We consider optimal monetary policy in a model that integrates credit frictions in the standard New Keynesian model with sticky prices and wages as well as adjustment costs of capital. Different from traditional models with credit frictions such as Carlstrom and Fuerst (1998), the model is able...

Besides providing enhanced macroeconomic and financial stability, a commitment to optimum monetary policy conduct in a developing economy like Nigeria could better deliver greater long-run stability of both internal and external macroeconomic factors. The need for an ordered monetary policy...

Should the central bank prevent 'excessive' asset price dynamics or should it wait until the boom spontaneously turns into a crash and intervene only afterwards? The debate over this issue goes back at least to the exchange between Bernanke-Gertler (BG) and Cecchetti but has not settled yet. In...

This paper estimates the cash flow and real effects of currency mismatches generated by foreign-priced operations of French manufacturers. The value of transactions invoiced in foreign currencies is twice as sensitive to exchange rates as the value of transactions invoiced in the domestic...

This paper examines the problem of monetary coordination building on an international sticky-price model. I demonstrate that monetary coordination is associated with a welfare transfer of 0.56%--0.57% of steady-state consumption from the high-openness economy to the low-openness economy. By...

Despite being at the core of central bankers' and investors' interest, the question of the European Central Bank's influence on global stock markets has not yet been fully answered. This paper aims to fill the gap by examining the influence of ECB monetary policy on 49 small open economies'...