BIROn - Birkbeck Institutional Research Online

Liquidity effects and cost channels in monetary transmission

Aksoy, Yunus and Basso, H. and Coto-Martinez, J. (2009) Liquidity effects and cost channels in monetary transmission. Working Paper. Birkbeck College, University of London, London, UK.

[img]
Preview
Text
7556.pdf - Published Version of Record

Download (507kB) | Preview

Abstract

We study liquidity effects and cost channels within a model of nominal rigidities and imperfect competition that gives explicit role for money-credit markets and investment decisions. We find that cost channels matter for monetary transmission, amplifying the impact of supply shocks and dampening the effects of demand shocks. Liquidity effects only obtain when the policy is specified by an interest rate policy rule and money-credit conditions are determined endogenously. We also find that determinacy issues are particularly relevant when models include the cost channel and explicit money-credit markets.

Metadata

Item Type: Monograph (Working Paper)
Additional Information: BWPEF 0902
Keyword(s) / Subject(s): Liquidity effect, cost channel, investment �nance, Taylor rule, indeterminacy
School: Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School
Research Centres and Institutes: Applied Macroeconomics, Birkbeck Centre for
Depositing User: Administrator
Date Deposited: 24 Jun 2013 14:00
Last Modified: 15 Apr 2025 20:10
URI: https://eprints.bbk.ac.uk/id/eprint/7556

Statistics

6 month trend
250Downloads
6 month trend
761Hits

Additional statistics are available via IRStats2.

Archive Staff Only (login required)

Edit/View Item
Edit/View Item