Expansive monetary policy in a portfolio model with endogenous asset supply

Stefan Schüder

Economic Modelling, 2014, vol. 41, issue C, 239-252

Abstract: This paper develops an open economy portfolio balance model with endogenous asset supply. Domestic producers choose an optimal capital structure and finance capital goods through credit, bonds and equity assets. Private households hold a portfolio of domestic and foreign assets, shift balances depending on risk–return considerations, and maximise real consumption in accordance with the law of one price.

Keywords: Portfolio balance; Monetary policy; Macroeconomic risk; Real capital; Financial markets (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:41:y:2014:i:c:p:239-252

DOI: 10.1016/j.econmod.2014.05.001

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