NBER

Jessica Roldán-Peña

Direccion de Analisis Economico - Finamex
Av. Paseo de la Reforma 342 - 27
Col. Juarez, CDMX, 06600
Mexico

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: Casa de Bolsa Finamex

NBER Working Papers and Publications

February 2017Tight Money-Tight Credit: Coordination Failure in the Conduct of Monetary and Financial Policies
with Julio A. Carrillo, Enrique G. Mendoza, Victoria Nuguer: w23151
Violations of Tinbergen rule and strategic interaction undermine monetary and financial policies in a New Keynesian model with the Bernanke-Gertler accelerator. Welfare costs of risk shocks are large because of efficiency losses and income effects of costly monitoring, but they are larger under a simple Taylor rule (STR) and a Taylor rule augmented with credit spreads (ATR) than under a dual rules regime (DRR) with a Taylor rule and a financial rule targeting spreads, by 264 and 138 basis points respectively. ATR and STR are tight money-tight credit regimes that respond too much to inflation and too little to spreads, and yield larger fluctuations in response to risk shocks. Reaction curves display shifts from strategic substitutes to complements in the choice of policy-rule elasticities. ...

National Bureau of Economic Research
1050 Massachusetts Ave.
Cambridge, MA 02138
617-868-3900
info@nber.org

Twitter RSS

View Full Site: One timeAlways