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EconStor >
ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/57966
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Full metadata record
| DC Field | | Value | | Language |
| dc.contributor.author | | Cao, Jin | | en_US |
| dc.contributor.author | | Illing, Gerhard | | en_US |
| dc.date.accessioned | | 2012-05-15 | | en_US |
| dc.date.accessioned | | 2012-05-21T10:07:02Z | | - |
| dc.date.available | | 2012-05-21T10:07:02Z | | - |
| dc.date.issued | | 2012 | | en_US |
| dc.identifier.uri | | http://hdl.handle.net/10419/57966 | | - |
| dc.description.abstract | | This paper provides a framework for modeling the risk-taking channel of monetary policy, the mechanism how financial intermediaries incentives for liquidity transformation are affected by the central banks reaction to financial crisis. Anticipating central banks reaction to liquidity stress gives banks incentives to invest in excessive liquidity transformation, triggering an 'interest rate trap' - the economy will remain stuck in a long lasting period of sub-optimal, low interest rate equilibrium. We demonstrate that interest rate policy as financial stabilizer is dynamically inconsistent, and the constraint efficient outcome can be implemented by imposing ex ante liquidity requirements. | | en_US |
| dc.language.iso | | eng | | en_US |
| dc.publisher | | CESifo München | | en_US |
| dc.relation.ispartofseries | | CESifo working paper: Monetary Policy and International Finance 3794 | | en_US |
| dc.subject.jel | | E50 | | en_US |
| dc.subject.jel | | G21 | | en_US |
| dc.subject.jel | | G28 | | en_US |
| dc.subject.ddc | | 330 | | en_US |
| dc.subject.keyword | | interest rate trap | | en_US |
| dc.subject.keyword | | risk-taking channel | | en_US |
| dc.subject.keyword | | systemic risk | | en_US |
| dc.subject.keyword | | liquidity requirements | | en_US |
| dc.subject.keyword | | macroprudential regulation | | en_US |
| dc.title | | "Interest Rate Trap", or: Why does the central bank keep the policy rate too low for too long time? | | en_US |
| dc.type | | Working Paper | | en_US |
| dc.identifier.ppn | | 715725645 | | en_US |
| dc.rights | | http://www.econstor.eu/dspace/Nutzungsbedingungen | | en_US |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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