Adrian and shin forthcoming b and gertler and

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Unformatted text preview: ese features is now well underway. Adrian and Shin (forthcoming b) and Gertler and Kiyotaki (forthcoming) provide surveys of recent work in this area. Here, I sketch a basic version of such a model, show how it can be used to interpret the recent crisis, and then discuss some implications of a model of this kind for monetary policy. A complete monetary dynamic stochastic general equilibrium model based on the approach approach sketched here is developed in Cúrdia and Woodford (2009). Credit and Economic Activity: A Market-Based Approach The The theory sketched here is appropriate to a market-based financial system in which the most important marginal suppliers of credit are no longer commercial banks and in which deposits subject to reserve requirements are no longer the most important important marginal source of funding even for commercial banks. Macroeconomics with a Single Interest Rate It It is useful to begin by recalling how interest-rate policy affects aggregate activity in a conventional model that...
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This note was uploaded on 11/23/2013 for the course ECON 11837649 taught by Professor Batchelder during the Spring '10 term at Pepperdine.

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