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Monetary policy tradeoffs between financial stability and price stability / by Malik Shukayev and Alexander Ueberfeldt.FB3-5/2016-49E-PDF

"We analyze the impact of interest rate policy on financial stability in an environment where banks can experience runs on their short-term liabilities, forcing them to sell assets at fire-sale prices. Price adjustment frictions and a state-dependent risk of financial crisis create the possibility of a policy tradeoff between price stability and financial stability. Focusing on Taylor rules with monetary policy possibly reacting to banks’ short-term liabilities, we find that the optimized policy uses the extra tool to support investment at the expense of higher inflation and output volatility"--Abstract.

Permanent link to this Catalogue record:
publications.gc.ca/pub?id=9.828455&sl=0

Publication information
Department/Agency
  • Bank of Canada.
TitleMonetary policy tradeoffs between financial stability and price stability / by Malik Shukayev and Alexander Ueberfeldt.
Series title
  • Staff Working Paper, 1701-9397 ; 2016-49
Publication typeMonograph - View Master Record
Language[English]
FormatDigital text
Electronic document
Note(s)
  • "November 2016."
  • Includes bibliographical references.
  • Abstract in French.
Publishing information
  • [Ottawa] : Bank of Canada, c2016.
Author / Contributor
  • Shukayev, Malik.
  • Ueberfeldt, Alexander.
Descriptionii, 44 p. : graphs.
Catalogue number
  • FB3-5/2016-49E-PDF
Subject terms
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