Monetary policy in a channel system

Arbeitspapier

Channel systems for conducting monetary policy are becoming increasingly popular. Despite their popularity, the consequences of implementing policy with a channel system are not well understood. We develop a general equilibrium framework of a channel system and investigate the optimal policy. A novel aspect of the channel system is that a central bank can tighten or loosen its policy without changing its target rate by increasing the interest-rate spread symmetrically around the target rate. This questions the characterization of optimal policy through interest-rate rules, as done in a large body of the literature on the optimal design of interest-rate rules.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 1929

Classification and Topics

• Classification: Wirtschaft ; Money and Interest Rates: General ; Monetary Policy, Central Banking, and the Supply of Money and Credit: General ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
• Subject: monetary policy ; interest rates ; search ; Zinspolitik ; Regelgebundene Politik ; Geldpolitik ; Suchtheorie ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Berentsen, Aleksander ; Monnet, Cyril
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/25974
• Last update: 10.03.2025, 11:44 AM CET