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|Title:||Analysis of monetary policy and financial stability: a new paradigm |
|Authors:||Goodhart, Charles A. E.|
Tsomocos, Dimitrios P.
|Issue Date:||2009 |
|Series/Report no.:||CESifo working paper 2885|
|Abstract:||This paper introduces agent heterogeneity, liquidity, and endogenous default to a DSGE framework. Our model allows for a comprehensive assessment of regulatory and monetary policy, as well as welfare analysis in the different sectors of the economy. Due to liquidity and endogenous default, the transmission mechanism of shocks is well defined, and their short to medium run effects on financial stability are properly captured.|
|Document Type:||Working Paper|
|Appears in Collections:||CESifo Working Papers, CESifo Group Munich|
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