Savings, asset scarcity, and monetary policy

Arbeitspapier

This paper analyzes optimal monetary and fiscal policy in a model where money and savings are essential and asset markets matter. The model is able to match some stylized facts about the correlation of real interest rates and stock price-dividend ratios. The results show that fiscal policy can improve welfare by increasing the amount of outstanding government debt. If the fiscal authority is not willing or able to increase debt, the monetary authority can improve welfare of current generations by reacting procyclically to asset return shocks; however, this policy affects welfare of future generations if it is not coordinated with fiscal policy measures. The model also shows that policies like QE reduce welfare of future generations.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: WWZ Working Paper ; No. 2018/13

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Interest Rates: Determination, Term Structure, and Effects ; Financial Markets and the Macroeconomy ; Monetary Policy ; Asset Pricing; Trading Volume; Bond Interest Rates ; General Financial Markets: Government Policy and Regulation
• Thema: new monetarism ; overlapping generations ; zero lower bound ; optimal stabilization

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Altermatt, Lukas
• Ereignis: Veröffentlichung
• (wer): University of Basel, Center of Business and Economics (WWZ)
• (wo): Basel
• (wann): 2018

Weitere Informationen

• DOI: doi:10.5451/unibas-ep64166
• Handle: http://hdl.handle.net/10419/185815
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ