A model in which monetary policy is about money
Optimal monetary policy is studied in a model with (i) heterogeneity in the degree to which different people are monitored (have publicly known histories); (ii) idiosyncratic shocks that give rise to heterogeneity in earning and spending realizations; and (iii) central-bank intervention in a "market" in claims or credit in which the participants are those who are heavily monitored. A special case of the model has everyone perfectly monitored. In that case, there is no role for money and no role for central-bank intervention. In the example displayed with imperfect monitoring, optimal intervention is not simple.
Year of publication: |
2009
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Authors: | Deviatov, Alexei ; Wallace, Neil |
Published in: |
Journal of Monetary Economics. - Elsevier, ISSN 0304-3932. - Vol. 56.2009, 3, p. 283-288
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Publisher: |
Elsevier |
Subject: | Monetary policy Search Central-bank intervention |
Saved in:
Online Resource
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