Output Gap in Presence of Financial Frictions and Monetary Policy Trade offs is popular PDF and ePub book, written by Francesco Furlanetto in 2014-07-18, it is a fantastic choice for those who relish reading online the Business & Economics genre. Let's immerse ourselves in this engaging Business & Economics book by exploring the summary and details provided below. Remember, Output Gap in Presence of Financial Frictions and Monetary Policy Trade offs can be Read Online from any device for your convenience.
Output Gap in Presence of Financial Frictions and Monetary Policy Trade offs Book PDF Summary
The recent global financial crisis illustrates that financial frictions are a significant source of volatility in the economy. This paper investigates monetary policy stabilization in an environment where financial frictions are a relevant source of macroeconomic fluctuation. We derive a measure of output gap that accounts for frictions in financial market. Furthermore we illustrate that, in the presence of financial frictions, a benevolent central bank faces a substantial trade-off between nominal and real stabilization; optimal monetary policy significantly reduces fluctuations in price and wage inflations but fails to alleviate the output gap volatility. This suggests a role for macroprudential policies.
Detail Book of Output Gap in Presence of Financial Frictions and Monetary Policy Trade offs PDF
- Author : Francesco Furlanetto
- Release : 18 July 2014
- Publisher : International Monetary Fund
- ISBN : 9781498331159
- Genre : Business & Economics
- Total Page : 44 pages
- Language : English
- PDF File Size : 7,7 Mb
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