• Credit frictions and optimal monetary policy(by Vasco Cúrdia and Michael Woodford)
  • 1. A new Keynesian model with financial frictions
  • 1.1 Financial frictions and aggregate demand
  • 1.2 The Dynamics of Private Indebtedness
  • 1.3 Aggregate Supply
  • 2. Credit Frictions and the Propagation of Disturbances
  • 2.1 Log-linearised structural relations
  • 2.2 Model Calibration
  • 2.3 Numerical results
  • 3. Optimal monetary stabilisation policy
  • 3.1 Linear-quadratic analysis
  • 3.2 Numerical analysis
  • 3.3 A spread-adjusted Taylor rule
  • 3.4 Should Policy Respond to Variations in Aggregate Credit?
  • 4. Provisional conclusions
  • 4.1 Implications for models for policy analysis
  • 4.2 Implications for monetary policy