Financial Frictions and Optimal Monetary Policy in a Small Open Economy

Citation data:

Banco de la Republica de Colombia, Borradores de Economia, No: 852

Publication Year:
2014
Usage 428
Downloads 246
Abstract Views 182
Citations 1
Citation Indexes 1
Repository URL:
http://repositorio.banrep.gov.co/handle/20.500.12134/6140
RePec URLs:
https://ideas.repec.org/p/bdr/borrec/852.html; https://ideas.repec.org/p/col/000094/012316.html
Author(s):
Bejarano-Rojas, Jesús Antonio; Charry, Luisa F.
Publisher(s):
Banco de la República
Tags:
E58 - Central Banks and Their Policies; E44 - Financial Markets and the Macroeconomy; E50 - Monetary Policy, Central Banking, and the Supply of Money and Credit: General; E52 - Monetary Policy; F41 - Open Economy Macroeconomics; Financial frictions; Optimal interest rate rules; Interest rate spreads; Welfare; Small open economy; Second order approximation; Política monetaria; Modelos económicos; Tasas de interés; F41 - Macroeconomía de la economía abierta; E50 - Política monetaria, bancos centrales, oferta de dinero y crédito: Generalidades; E52 - Política monetaria; E58 - Bancos centrales y sus políticas; E44 - Mercados financieros y macroeconomía; Financial frictions, optimal interest rate rules, interest rate spreads, welfare, small open economy, second order approximation
paper description
In this paper we set up a small open economy model with financial frictions, following Curdia and Woodford (2010)’s model. Unlike other results in the literature such as Curdia and Woodford (2010), McCulley and Ramin (2008) and Taylor (2008), we find that