Benigno, Gianluca; Chen, Huigang; Otrok, Christopher; … - C.E.P.R. Discussion Papers - 2012
In this paper we study whether policy makers should wait to intervene until a financial crisis strikes or rather act in … the set of policy tools available and what these instruments can achieve when a crisis strikes. For example, in the … context of our model, we find that, if the policy tools is constrained so that the first best cannot be achieved and the …