首页 | 本学科首页   官方微博 | 高级检索  
     检索      


Liquidity risk, economic development, and the effects of monetary policy
Authors:Edgar Ghossoub
Institution:a The University of Texas at San Antonio, USA
b Department of Economics, Finance, and Legal Studies, 200 Alston Hall, University of Alabama, Tuscaloosa, AL 35487, USA
Abstract:Empirical evidence indicates that monetary policy is not super-neutral in many countries. In particular, in high inflation economies, inflation is negatively related to economic activity. By comparison, inflation may be positively correlated with output in low inflation countries. We present a neoclassical growth model with money in which the incidence of liquidity risk is inversely related to aggregate capital formation. Interestingly, there may be multiple monetary steady-states where the effects of monetary policy vary. In poor economies, the financial system is highly distorted and higher rates of money growth are associated with less capital formation. In contrast, in advanced economies, a Tobin effect is observed. Since inflation exacerbates distortions from a coordination failure in the low-capital steady-state, individuals become much more exposed to liquidity risk. Consequently, optimal monetary policy depends on the level of development.
Keywords:E41  E52  E31  O42
本文献已被 ScienceDirect 等数据库收录!
设为首页 | 免责声明 | 关于勤云 | 加入收藏

Copyright©北京勤云科技发展有限公司  京ICP备09084417号