Federal Reserve Bank of Cleveland
Working Papers (Old Series)
Monetary policy in a world without perfect capital markets
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.
Cite this item
Charles T. Carlstrom & Timothy S. Fuerst, Monetary policy in a world without perfect capital markets, Federal Reserve Bank of Cleveland, Working Papers (Old Series) 0115, 2001.
Keywords: Monetary policy ; Interest rates
This item with handle RePEc:fip:fedcwp:0115
is also listed on EconPapers
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