Monetary Policy, Liquidity Stress and Learning Dynamics
This paper examines the interactions between monetary policy and stability of interbank money markets. After showing some empirical evidence of a central bank's concern for money market stability I derive a forward smoothing interest rate rule moving from an explicit target in terms of a liquidity stress indicator. The implications of this approach on equilibrium determinacy and learnability are analyzed. I show that equilibrium uniqueness is not necessarily compatible with equilibrium learnability, and learnability, in general, has tighter requirements than determinacy.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 06 85225.550
Fax: 06 85225.973
Web page: http://ricerca.economiaefinanza.luiss.it/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:lui:casmef:1102. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stefano Marzioni)
If references are entirely missing, you can add them using this form.