EconPapers    
Economics at your fingertips  
 

Liquidity, Business Cycles and Monetary Policy

Nobuhiro Kiyotaki () and John Moore
Additional contact information
Nobuhiro Kiyotaki: http://www.princeton.edu/~kiyotaki/

Edinburgh School of Economics Discussion Paper Series from Edinburgh School of Economics, University of Edinburgh

Abstract: The paper presents a model of a monetary economy where there are differences in liquidity across assets. Money circulates because it is more liquid than other assets, not because it has any special function. There is a spectrum of returns on assets, reflecting their differences in liquidity. The model is used, first, to investigate how aggregate activity and asset prices fluctuate with shocks to productivity and liquidity; second, to examine what role government policy might have through open market operations that change the mix of assets held by the private sector. With its emphasis on liquidity rather than sticky prices, the model harks back to an earlier interpretation of Keynes (1936), following Tobin (1969).

JEL-codes: E10 E44 E50 (search for similar items in EconPapers)
Pages: 44
Date: 2012-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (198)

Downloads: (external link)
http://www.econ.ed.ac.uk/papers/id113_esedps.pdf

Related works:
Working Paper: Liquidity, Business Cycles, and Monetary Policy (2012) Downloads
Working Paper: Liquidity, Business Cycles, and Monetary Policy (2008)
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:edn:esedps:113

Access Statistics for this paper

More papers in Edinburgh School of Economics Discussion Paper Series from Edinburgh School of Economics, University of Edinburgh 31 Buccleuch Place, EH8 9JT, Edinburgh. Contact information at EDIRC.
Bibliographic data for series maintained by Research Office ().

 
Page updated 2025-03-30
Handle: RePEc:edn:esedps:113