haku: @indexterm MONEY MARKETS / yhteensä: 577
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| Tekijä: | Huybens, E. Smith, B. D. |
| Otsikko: | Financial market frictions, monetary policy, and capital accumulation in a small open economy |
| Lehti: | Journal of Economic Theory
1998 : AUG, VOL. 81:2, p. 353-400 |
| Asiasana: | ECONOMIC THEORY MONETARY POLICY GROWTH INTEREST RATES MONEY MARKETS GROSS NATIONAL PRODUCT |
| Kieli: | eng |
| Tiivistelmä: | In the study, a small open economy with a costly state verification problem and binding reserve requirements is considered. The presence of these frictions leads to the existence of two steady states with credit rationing. An increase in the money growth rate, the world interest rate or reserve requirements raises (lowers) GDP in the high (low) activity steady state. However, sufficiently large increases in money growth or the world interest rate can transform the high activity steady state from a sink to a source. The model also delivers prescriptions for restoring the stability of the steady state in such an eventuality. |
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