The optimal monetary instrument for prudential purposes

The purpose of this paper is to assess the choice between adopting a monetary base or an interest rate setting instrument to maintain financial stability. Our results suggest that the interest rate instrument is preferable, since during times of a panic or financial crisis the Central Bank automati...

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Bibliographic Details
Main Authors: Goodhard, C, Sunirand, P, Tsomocos, D
Format: Working paper
Published: University of Oxford 2008