Working paper
The optimal monetary instrument for prudential purposes
- Abstract:
- The purpose of this paper is to assess the choice between adopting a monetary base or an interest rate setting instrument to maintain financial stability. Our results suggest that the interest rate instrument is preferable, since during times of a panic or financial crisis the Central Bank automatically satisfies the increased demand for money. Thus, it prevents sharp losses in asset values and enhanced asset volatility
- Publication status:
- Published
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(Version of record, bin, 43.2KB, Terms of use)
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Authors
- Publisher:
- University of Oxford
- Series:
- Department of Economics Discussion Paper Series
- Publication date:
- 2008-06-01
- Paper number:
- 2008fe26
- Keywords:
- Pubs id:
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1144038
- Local pid:
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pubs:1144038
- Deposit date:
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2020-12-15
- ARK identifier:
Terms of use
- Copyright date:
- 2008
- Rights statement:
- Copyright 2008 The Author(s)
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