BIROn - Birkbeck Institutional Research Online

    Monetary stabilisation with nominal asymmetries

    Wright, Stephen (2004) Monetary stabilisation with nominal asymmetries. Economic Journal 114 (492), pp. 196-222. ISSN 0013-0133.

    Full text not available from this repository.

    Abstract

    Optimal monetary stabilisation in the standard New Keynesian framework usually assumes a policy loss function from outside the model. In this paper, in contrast, the objective arises directly from the model. Credit constraints and sticky nominal debt contracts imply that monetary stabilisation has asymmetric impacts depending on whether consumers are credit‐constrained. The policy problem is to maximise some weighting of the expected utility of the different types of consumer. Features of optimal stabilisation are derived that do not appear to be far out of line with empirical evidence for many countries but that clearly conflict with standard loss function results.

    Metadata

    Item Type: Article
    School: School of Business, Economics & Informatics > Economics, Mathematics and Statistics
    Depositing User: Sarah Hall
    Date Deposited: 19 May 2020 08:13
    Last Modified: 19 May 2020 08:13
    URI: https://eprints.bbk.ac.uk/id/eprint/31968

    Statistics

    Downloads
    Activity Overview
    0Downloads
    95Hits

    Additional statistics are available via IRStats2.

    Archive Staff Only (login required)

    Edit/View Item Edit/View Item