Interest rate uncertainty as a policy tool / by Fabio Ghironi and Galip Kemal Ozhan. : FB3-5/2020-13E-PDF
"We study a novel policy tool—interest rate uncertainty—that can be used to discourage inefficient capital inflows and to adjust the composition of external account between short-term securities and foreign direct investment (FDI). We identify the trade-offs faced in navigating between external balance and price stability. The interest rate uncertainty policy discourages short-term inflows mainly through portfolio risk and precautionary saving channels. A markup channel generates net FDI inflows under imperfect exchange rate pass-through. We further investigate new channels under different assumptions about the irreversibility of FDI, the currency of export invoicing, risk aversion of outside agents, and effective lower bound in the rest of the world. Under every scenario, uncertainty policy is inflationary"--Abstract.
Lien permanent pour cette publication :
publications.gc.ca/pub?id=9.886404&sl=1
| Ministère/Organisme | Bank of Canada. |
|---|---|
| Titre | Interest rate uncertainty as a policy tool / by Fabio Ghironi and Galip Kemal Ozhan. |
| Titre de la série | Staff working paper = Document de travail du personnel, 1701-9397 ; 2020-13 |
| Type de publication | Série - Voir l'enregistrement principal |
| Langue | [Anglais] |
| Format | Électronique |
| Document électronique | |
| Note(s) | Cover title. Includes bibliographical references. Includes abstract in French. |
| Information sur la publication | Ottawa, Ontario, Canada : Bank of Canada = Banque du Canada, 2020. ©2020 |
| Auteur / Contributeur | Ghironi, Fabio, author. |
| Description | 1 online resource (iv, 79 pages) : colour charts. |
| Numéro de catalogue |
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| Descripteurs | Interest rates -- Econometric models. Uncertainty -- Econometric models. Investments, Foreign -- Econometric models. Taux d'intérêt -- Modèles économétriques. Incertitude -- Modèles économétriques. Investissements étrangers -- Modèles économétriques. Monetary policy -- Econometric models. Politique monétaire -- Modèles économétriques. |