Heterodox Central Banking
Luis Cespedes,
Roberto Chang and
Javier García-Cicco
Authors registered in the RePEc Author Service: Javier Garcia Cicco
Working Papers Central Bank of Chile from Central Bank of Chile
Abstract:
This paper discusses theoretical and practical aspects of the various unconventional central bank policies during the 2008-2009 crisis. In terms of theory, we first discuss the role of credibility in the attainment of inflationary goals once the nominal interest rate is at a lower bound, paying particular attention to the role of the central bank’s balance sheet. Additionally, we present a model which has at its core a financial imperfection that highlights the role of bank’s capital as well as the relevance of alternative credit policies that can be used to deal with financial distress. On the other hand, we review evidence regarding the recent experience. We discuss the timing and type of observed unconventional policies. We then explore alternative measures to assess the stance of monetary policy in a situation when the policy rate has reached its lower bound. Finally, we present some descriptive evidence on the effect of the applied policies on the shape of the yield curve and the lending-deposit spread.
Date: 2010-07
New Economics Papers: this item is included in nep-cba, nep-mon and nep-pke
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Citations: View citations in EconPapers (1)
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https://www.bcentral.cl/documents/33528/133326/DTBC_586.pdf (application/pdf)
Related works:
Chapter: Heterodox Central Banking (2011) 
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Persistent link: https://EconPapers.repec.org/RePEc:chb:bcchwp:586
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