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Expansive monetary policy in a portfolio model with endogenous asset supply

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  • Schüder, Stefan

Abstract

This paper develops an open economy portfolio balance model with endogenous asset supply. Domestic producers choose an optimal capital structure and finance capital goods through credit, bonds and equity assets. Private households hold a portfolio of domestic and foreign assets, shift balances depending on risk–return considerations, and maximise real consumption in accordance with the law of one price.

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  • Schüder, Stefan, 2014. "Expansive monetary policy in a portfolio model with endogenous asset supply," Economic Modelling, Elsevier, vol. 41(C), pages 239-252.
    • Handle: RePEc:eee:ecmode:v:41:y:2014:i:c:p:239-252
    DOI: 10.1016/j.econmod.2014.05.001
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