Analysis of Monetary Policy and Financial Stability: A New Paradigm

Charles A. E. Goodhart, Carolina Osorio and Dimitrios Tsomocos

No 2885, CESifo Working Paper Series from CESifo

Abstract: This paper introduces agent heterogeneity, liquidity, and endogenous default to a DSGE framework. Our model allows for a comprehensive assessment of regulatory and monetary policy, as well as welfare analysis in the different sectors of the economy. Due to liquidity and endogenous default, the transmission mechanism of shocks is well defined, and their short to medium run effects on financial stability are properly captured.

Keywords: general equilibrium; financial fragility; monetary policy; regulation (search for similar items in EconPapers)
JEL-codes: D50 E43 E44 E50 G01 G20 (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (37)

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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2885

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