Title of article
Optimalmonetarypolicyina‘suddenstop’
Author/Authors
FabioBraggion، نويسنده ,
Issue Information
روزنامه با شماره پیاپی سال 2008
Pages
14
From page
582
To page
595
Abstract
In thewakeofthe1997–98financialcrises,interestratesinAsiawereraised
immediately,andthenreducedsharply.Wedescribeanenvironmentinwhichthisis
theoptimalmonetarypolicy.Theoptimalityoftheimmediateriseintheinterestrateis
an exampleofthetheoryofthesecondbest:althoughhighinterestratesintroducean
inefficiencywedgeintothelabormarket,theyareneverthelesswelfareimproving
becausetheymitigatedistortionsduetobindingcollateralconstraints.Overtime,asthe
collateralconstraintislessbinding,thefamiliarFriedmanforcesdominate,andinterest
ratesareoptimallysetaslowaspossible
Keywords
CollateralconstraintFriedmanruleSmall openeconomy
Journal title
Journal of Monetary Economics
Serial Year
2008
Journal title
Journal of Monetary Economics
Record number
846314
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