eCite Digital Repository
Monetary Policy in Illiquid Markets: Options for a Small Open Economy
Citation
Claus, E and Dungey, MH and Fry, R, Monetary Policy in Illiquid Markets: Options for a Small Open Economy, Open Economies Review, 19, (3) pp. 305-336. ISSN 0923-7992 (2008) [Refereed Article]
DOI: doi:10.1007/s11079-007-9059-z
Abstract
Two impediments to effective monetary policy operation include illiquidity in bond markets and the zero bound of interest rates. Under these conditions alternative means of enacting monetary policy may be required. This paper empirically explores policy options implemented through equity and currency markets that will generate similar inflation responses at different time horizons. In terms of GDP loss the least costly means of achieving a particular long run inflation outcome is via the current monetary policy arrangements. Currency market alternatives are volatile but less expensive than the equity market in terms of output loss for short term inflation horizons. © Springer Science+Business Media, LLC 2007.
Item Details
Item Type: | Refereed Article |
---|---|
Research Division: | Economics |
Research Group: | Applied economics |
Research Field: | Financial economics |
Objective Division: | Economic Framework |
Objective Group: | Macroeconomics |
Objective Field: | Monetary policy |
UTAS Author: | Dungey, MH (Professor Mardi Dungey) |
ID Code: | 56985 |
Year Published: | 2008 |
Web of Science® Times Cited: | 4 |
Deposited By: | Economics and Finance |
Deposited On: | 2009-06-11 |
Last Modified: | 2015-09-01 |
Downloads: | 0 |
Repository Staff Only: item control page