Please use this identifier to cite or link to this item:
https://hdl.handle.net/10216/73644
Author(s): | Fabio Verona Manuel Mota Freitas Martins Inês Drumond |
Title: | Monetary policy shocks in a DSGE model with a shadow banking system |
Issue Date: | 2011 |
Abstract: | This paper is motivated by the recent nancial crisis and addresses whether a too low for too long interest rate policy may generate a boom-bust cycle. We suggest a model in which a microfounded shadow banking sector is included in an otherwise state-of-the-art DSGE model.When faced with perverse incentives, financial intermediaries within the shadow banking sector can divert a fraction of stockholders' profits for their own benets and extend credit at a discounted rate. The model predicts that long periods of accommodative monetary policy do create thepreconditions for, but do not cause per se, a boom-bust cycle. Rather, it is the combination ofa persistent monetary ease with microeconomic distortions in the financial system that causes a boom-bust. |
Subject: | Economia, Economia e gestão Economics, Economics and Business |
Scientific areas: | Ciências sociais::Economia e gestão Social sciences::Economics and Business |
URI: | https://repositorio-aberto.up.pt/handle/10216/73644 |
Document Type: | Trabalho Académico |
Rights: | openAccess |
License: | https://creativecommons.org/licenses/by-nc/4.0/ |
Appears in Collections: | FEP - Trabalho Académico |
Files in This Item:
File | Description | Size | Format | |
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40270.pdf | Cef.up Working Paper nº. 2011-01, February 2011 | 1.13 MB | Adobe PDF | View/Open |
This item is licensed under a Creative Commons License