Procyclical Monetary Policy and Governance
AbstractWeak governance adversely affects firm’s net worth and consequently the value of its collateral. This negative impact on the collateral reduces the external credit available for importing inputs constraining potential output. As a result, a stronger procyclical monetary policy stance is adopted for protecting the exchange rate and hence arresting the degradation in the collateral constraint.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 27022.
Date of creation: Nov 2010
Date of revision:
Collateral Constraints; Governance; Monetary Policy;
Find related papers by JEL classification:
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-04 (All new papers)
- NEP-MAC-2010-12-04 (Macroeconomics)
- NEP-MON-2010-12-04 (Monetary Economics)
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