Working Paper
Monetary policy in a world without perfect capital markets
Abstract: This working paper examines a theoretical model in which an entrepreneur?s net worth affects his ability to finance current activity. Net worth, in turn, is determined by asset prices, which can be affected by monetary policy. In this environment, the central bank plays a welfare-improving role by responding to asset price and technology shocks.
https://doi.org/10.26509/frbc-wp-200115
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Bibliographic Information
Provider: Federal Reserve Bank of Cleveland
Part of Series: Working Papers (Old Series)
Publication Date: 2001
Number: 0115