The Monetary Transmission Mechanism: Is it Relevant for Policy?

Bernardino Adao () and Pedro Teles
Authors registered in the RePEc Author Service: Isabel Correia ()

Working Papers from Banco de Portugal, Economics and Research Department

Abstract: We study environments with sticky prices, wages or portfolios where it is feasible and optimal to use monetary policy to replicate the allocation under full flexibility. In these environments the optimal policy does not depend on the scope of the frictions. In this sense, the strength of the monetary transmission mechanism is irrelevant for the conduct of monetary policy. So, asymmetries in the strength of the transmission mechanisms do not impose a cost on a common policy.

JEL-codes: E31 E41 E58 E62 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: The Monetary Transmission Mechanism: Is It Relevant for Policy? (2004)
Working Paper: The Monetary Transmission Mechanism: Is it Relevant for Policy? (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:ptu:wpaper:w200313

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