Monetary policy in a channel system

Aleksander Berentsen () and Cyril Monnet ()

Journal of Monetary Economics, 2008, vol. 55, issue 6, pages 1067-1080

Abstract: Channel systems for conducting monetary policy are becoming increasingly popular. Despite its popularity, the consequences of implementing policy with a channel system are not well understood. We develop a general equilibrium framework of a channel system and study the optimal policy. A novel aspect of the channel system is that a central bank can "tighten" or "loosen" its policy without changing its policy rate. This policy instrument has so far been overlooked by a large body of the literature on the optimal design of interest-rate rules.

Keywords: Monetary; policy; Interest; rates; Search (search for similar items in EconPapers)
Date: 2008

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Related works:
Working Paper: Monetary Policy in a Channel System (2007)
Working Paper: Monetary Policy in a Channel System (2006)
Working Paper: Monetary policy in a channel system (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:eee:moneco:v:55:y:2008:i:6:p:1067-1080

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