Imperfect capital markets and nominal wage rigidities

Charles Carlstrom () and Timothy S. Fuerst ()

No 205, Working Paper from Federal Reserve Bank of Cleveland

Abstract: Should monetary policy respond to asset prices? This paper analyzes a general equilibrium model with imperfect capital markets and rigid nominal wages. Within the context of this model, there is a natural role for the benevolent central bank to dampen the real effects of asset price movements.

Keywords: Monetary policy; Asset pricing (search for similar items in EconPapers)
Date: 2002
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Persistent link: http://EconPapers.repec.org/RePEc:fip:fedcwp:0205

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