Two Roles for Monetary Policy when the Asset Market is Incomplete and Information is Asymmetric

Paola Donati ()

No 1996024, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: I construct and analyze an example of an economy with production and money under conditions of uncertainty, asymmetric information, and an incomplete asset market. For alternative scenarios, which differ in the information available to consumers and firms, I compute the equilibrium prices and allocations, and I explicitly display the associated indeterminacy. I argue that monetary policy can he effective (i) by modifying the structure of payoffs of assets and (ii) by modifying the information conveyed by prices.

Keywords: Incomplete Markets; Monetary Policy; Asymmetric Information (search for similar items in EconPapers)
JEL-codes: C68 D52 D82 E52 (search for similar items in EconPapers)
Date: 1996-05-01
References: Add references at CitEc
Citations:

Downloads: (external link)
https://sites.uclouvain.be/core/publications/coredp/coredp1996.html (text/html)

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: https://EconPapers.repec.org/RePEc:cor:louvco:1996024

Access Statistics for this paper

More papers in LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC.
Bibliographic data for series maintained by Alain GILLIS ().