Monetary policy in a world without perfect capital markets

Charles Carlstrom () and Timothy S. Fuerst ()

No 115, Working Paper from Federal Reserve Bank of Cleveland

Abstract: This working paper examines a theoretical model in which an entrepreneur’s net worth affects his ability to finance current activity. Net worth, in turn, is determined by asset prices, which can be affected by monetary policy. In this environment, the central bank plays a welfare-improving role by responding to asset price and technology shocks.

Keywords: Monetary policy; Interest rates (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-dge, nep-mon and nep-pke
Date: 2001
View list of references View citations in EconPapers

Downloads: (external link)
http://www.clevelandfed.org/research/workpaper/2001/Wp0115.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:fip:fedcwp:0115

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Paper from Federal Reserve Bank of Cleveland
Contact information at EDIRC.
Series data maintained by Diane Rosenberger ().