Working Paper

Imperfect capital markets and nominal wage rigidities


Abstract: Should monetary policy respond to asset prices? This paper analyzes a general equilibrium model with imperfect capital markets and rigid nominal wages. Within the context of this model, there is a natural role for the benevolent central bank to dampen the real effects of asset price movements.

Keywords: Monetary policy; Asset pricing;

https://doi.org/10.26509/frbc-wp-200205

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File(s): https://doi.org/10.26509/frbc-wp-200205
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Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Working Papers (Old Series)

Publication Date: 2002

Number: 0205