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.
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| Department/Agency | Bank of Canada. |
|---|---|
| Title | Monetary policy tradeoffs between financial stability and price stability / by Malik Shukayev and Alexander Ueberfeldt. |
| Series title | Staff Working Paper, 1701-9397 ; 2016-49 |
| Publication type | Series - View Master Record |
| Language | [English] |
| Format | Electronic |
| 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. |
| Description | ii, 44 p. : graphs. |
| Catalogue number |
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| Subject terms | Interest rates Banks Monetary policy Financial analysis |
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