Credit spread and monetary policy

Research output: Contribution to journalArticlepeer-review

5 Citations (Scopus)

Abstract

We show that the spread-adjusted Taylor rule including a response to the credit spread is a theoretically optimal monetary policy under heterogeneous loan contracts. However, the optimal response to the credit spread is ambiguous, given the financial market structure.

Original languageEnglish
Pages (from-to)26-28
Number of pages3
JournalEconomics Letters
Volume114
Issue number1
DOIs
Publication statusPublished - 2012 Jan

Keywords

  • Credit spread
  • Heterogeneous loan contracts
  • Optimal monetary policy

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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