Adverse Selection, Segmented Markets, And The Role Of Monetary Policy
AbstractA model is constructed in which trading partners are asymmetrically informed about future trading opportunities and where spatial and informational frictions limit arbitrage between markets. These frictions create an inefficiency relative to a full information equilibrium, and the extent of this inefficiency is affected by monetary policy. A Friedman rule is optimal under a wide range of circumstances, including ones where segmented markets limit the extent of monetary policy intervention.
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Bibliographic InfoArticle provided by Cambridge University Press in its journal Macroeconomic Dynamics.
Volume (Year): 15 (2011)
Issue (Month): S2 (September)
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Other versions of this item:
- Williamson, Stephen & Sanches, Daniel, 2009. "Adverse Selection, Segmented Markets, and the Role of Monetary Policy," MPRA Paper 20691, University Library of Munich, Germany.
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
- E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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21486, University Library of Munich, Germany.
- Stephen D. Williamson & Randall Wright, 2010.
"New Monetarist Economics: models,"
443, Federal Reserve Bank of Minneapolis.
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