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Query: no. is 295
1 from 468 working papers selected.

Number	295
Title	Monetary Policy in a Channel System
Author(s)	Aleksander Berentsen and Cyril Monet
Published	Jul 2006
in	Working Paper - Institute for Empirical Research in Economics
Abstract	This paper studies the theoretical properties of a channel system of interestrate control in a dynamic general equilibrium model. Agents are subject to liquidity shocks which can be partially insured in a secured money market, or at a standing facility operated by the central bank. We show that it is optimal to have a strictly positive interest rate corridor and that a shift of the corridor affects the money market rate one for one. Moreover, the central bank can tighten its policy without changing its policy rate by simply increasing the corridor symmetrically around the policy rate.
Keywords	Monetary Policy, Interest Rates, Search
Download	http://www.iew.uzh.ch/wp/iewwp295.pdf (424 kB)