Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/319937 
Year of Publication: 
2011
Series/Report no.: 
CASMEF Working Paper Series No. WP 2011/02
Publisher: 
LUISS Guido Carli, Department of Economics and Business, Arcelli Centre for Monetary and Financial Studies, Rome
Abstract: 
This paper examines the interactions between monetary policy and stability of interbank money markets. After showing some empirical evidence of a central bank's concern for money market stability I derive a forward smoothing interest rate rule moving from an explicit target in terms of a liquidity stress indicator. The implications of this approach on equilibrium determinacy and learnability are analyzed. I show that equilibrium uniqueness is not necessarily compatible with equilibrium learnability, and learnability, in general, has tighter requirements than determinacy.
Subjects: 
LIBOR-OIS spread
Taylor Rule
Adaptive Learning
DSGE models
Monetary Policy
JEL: 
E43
E44
E52
E58
Document Type: 
Working Paper

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