Liquidity, Default and the Interaction of Financial Stability and Monetary Policy

Peiris, Udara, Tsomocos, Dimitrios and Vardoulakis, Alexandros (2018) Liquidity, Default and the Interaction of Financial Stability and Monetary Policy. In: Hartmann, Philipp, Huang, Haizhou and Schoenmaker, Dirk, (eds.) The changing fortunes of central banking. Cambridge University Press, New York, pp. 153-168. ISBN 978-1108529549

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Abstract

“Default is to macro-economics what sin is to theology: regrettable but central and essential”. The contemporaneous assessment of both liquidity and default within a framework of missing financial markets, multiple currencies, heterogeneous economic actors (i.e., investors, firms and intermediaries) and multiple externalities is warranted for analysing the interplay of financial and price stability. Thus, the complementarity and substitutability of regulatory and monetary policies can be identified and dissected. The optimal policy mix may be subsequently determined given the objectives of the fiscal and monetary authorities.

Item Type: Book Section
Keywords: finance
Subject(s): Finance
Date Deposited: 09 May 2017 11:30
Last Modified: 03 Oct 2018 15:58
Funders: not applicable
URI: http://eureka.sbs.ox.ac.uk/id/eprint/6352

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