Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/194214
Authors: 
Jiang, Shifu
Year of Publication: 
2017
Series/Report no.: 
FIW Working Paper No. 180
Abstract: 
I study the Ramsey problem for three unconventional monetary policies in a twocountry model. An equity injection into financial intermediaries is the most efficient policy. Due to precautionary effects of future risk, a central bank should exit from these policies in accordance with but slower than the speed of deleveraging in the financial sector. The optimal policy is changed considerably if cross-country policy cooperation is not imposed. In this case, the unconventional interventions tend to be too strong in one country but too weak in the other. The cooperation gain is a function of policy cost. At last, I evaluate several simple rules and find that the rule responding to gaps in asset prices mimics the optimal policy very well.
JEL: 
E44
E58
F41
F42
C63
Document Type: 
Working Paper

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