Journal ArticleDOI
A model of unconventional monetary policy
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TLDR
The authors developed a quantitative monetary DSGE model with financial intermediaries that face endogenously determined balance sheet constraints and used the model to evaluate the effects of the central bank using unconventional monetary policy to combat a simulated financial crisis.About:
This article is published in Journal of Monetary Economics.The article was published on 2011-01-01. It has received 2158 citations till now. The article focuses on the topics: Quantitative easing & Inflation targeting.read more
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Book ChapterDOI
Financial Intermediation and Credit Policy in Business Cycle Analysis
Mark Gertler,Nobuhiro Kiyotaki +1 more
TL;DR: The authors developed a canonical framework to think about credit market frictions and aggregate economic activity in the context of the current crisis, and used the framework to address two issues in particular: first, how disruptions in financial intermediation can induce a crisis that affects real activity; and second, how various credit market interventions by the central bank and the Treasury of the type we have seen recently, might work to mitigate the crisis.
Journal ArticleDOI
Credit Spreads and Business Cycle Fluctuations
Simon Gilchrist,Egon Zakrajsek +1 more
TL;DR: In this paper, the authors examined the relationship between credit spreads and economic activity, by constructing a credit spread index based on an extensive data set of prices of outstanding corporate bonds trading in the secondary market and found that the predictive content of credit spreads for economic activity is due primarily to movements in the excess bond premium.
Journal ArticleDOI
Collective Moral Hazard, Maturity Mismatch, and Systemic Bailouts †
Emmanuel Farhi,Jean Tirole +1 more
TL;DR: In this article, the authors characterize the optimal regulation, which takes the form of a minimum liquidity requirement coupled with monitoring of the quality of liquid assets, and establish the robustness of their insights when the set of optimal regulations is set.
Journal ArticleDOI
A macroeconomic model with a financial sector
TL;DR: This paper studied a macroeconomic model in which financial experts borrow from less productive agents and found that the economy is prone to instability and occasionally enters volatile episodes, and that risk sharing within the financial sector reduces many inefficiencies, it can also amlify systemic risks.
Journal ArticleDOI
Monetary Policy Surprises, Credit Costs, and Economic Activity †
Mark Gertler,Peter Karadi +1 more
TL;DR: In this paper, the authors provide evidence on the transmission of monetary policy shocks in a setting with both economic and financial variables, and show that shocks identified using high frequency surprises around policy announcements as external instruments produce responses in output and inflation that are typical in monetary VAR analysis.
References
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Journal ArticleDOI
An intertemporal capital asset pricing model
TL;DR: In this article, an intertemporal model for the capital market is deduced from portfolio selection behavior by an arbitrary number of investors who aot so as to maximize the expected utility of lifetime consumption and who can trade continuously in time.
Posted Content
The Financial Accelerator in a Quantitative Business Cycle Framework
TL;DR: This article developed a dynamic general equilibrium model that is intended to help clarify the role of credit market frictions in business fluctuations, from both a qualitative and a quantitative standpoint, and the model is a synthesis of the leading approaches in the literature.
Posted Content
Agency Costs, Net Worth, And Business Fluctuations
Ben S. Bernanke,Mark Gertler +1 more
TL;DR: The authors constructs a simple neoclassical model of intrinsic business cycle dynamics in which borrowers' balance sheet positions play an important role and shows that the agency costs of undertaking physical investments are inversely related to the entrepreneur's/borrower's net worth.
Journal ArticleDOI
Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy
TL;DR: In this article, the authors present a model embodying moderate amounts of nominal rigidities that accounts for the observed inertia in inflation and persistence in output, and the key features of their model are those that prevent a sharp rise in marginal costs after an expansionary shock to monetary policy.
Journal ArticleDOI
Financial Intermediation, Loanable Funds, and The Real Sector
Bengt Holmstrom,Jean Tirole +1 more
TL;DR: In this article, an incentive model of financial intermediation in which firms as well as intermediaries are capital constrained is studied, and how the distribution of wealth across firms, intermediaries, and uninformed investors affects investment, interest rates, and the intensity of monitoring.