Rebucci, Alessandro; Benigno, Gianluca; Chen, Huigang; … - Inter-American Development Bank - 2012
This paper studies whether policymakers should wait to intervene until a financial crisis strikes or rather act in a … critically on the set of policy tools available and what these instruments can achieve when a crisis strikes. For example, in the … context of the model, it is found that, if the policy tools are constrained so that the first best cannot be achieved and the …