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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| Format: | Working paper |
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University of Oxford
2008
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| _version_ | 1826301394701778944 |
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| author | Goodhard, C Sunirand, P Tsomocos, D |
| author_facet | Goodhard, C Sunirand, P Tsomocos, D |
| author_sort | Goodhard, C |
| collection | OXFORD |
| description | 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 automatically satisfies the increased demand for money. Thus, it prevents sharp losses in asset values and enhanced asset volatility |
| first_indexed | 2024-03-07T05:31:46Z |
| format | Working paper |
| id | oxford-uuid:e284ea0e-bd64-451e-9f9e-0cce8499cc41 |
| institution | University of Oxford |
| last_indexed | 2024-03-07T05:31:46Z |
| publishDate | 2008 |
| publisher | University of Oxford |
| record_format | dspace |
| spelling | oxford-uuid:e284ea0e-bd64-451e-9f9e-0cce8499cc412022-03-27T10:01:49ZThe optimal monetary instrument for prudential purposesWorking paperhttp://purl.org/coar/resource_type/c_8042uuid:e284ea0e-bd64-451e-9f9e-0cce8499cc41Symplectic ElementsBulk import via SwordUniversity of Oxford2008Goodhard, CSunirand, PTsomocos, DThe 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 automatically satisfies the increased demand for money. Thus, it prevents sharp losses in asset values and enhanced asset volatility |
| spellingShingle | Goodhard, C Sunirand, P Tsomocos, D The optimal monetary instrument for prudential purposes |
| title | The optimal monetary instrument for prudential purposes |
| title_full | The optimal monetary instrument for prudential purposes |
| title_fullStr | The optimal monetary instrument for prudential purposes |
| title_full_unstemmed | The optimal monetary instrument for prudential purposes |
| title_short | The optimal monetary instrument for prudential purposes |
| title_sort | optimal monetary instrument for prudential purposes |
| work_keys_str_mv | AT goodhardc theoptimalmonetaryinstrumentforprudentialpurposes AT sunirandp theoptimalmonetaryinstrumentforprudentialpurposes AT tsomocosd theoptimalmonetaryinstrumentforprudentialpurposes AT goodhardc optimalmonetaryinstrumentforprudentialpurposes AT sunirandp optimalmonetaryinstrumentforprudentialpurposes AT tsomocosd optimalmonetaryinstrumentforprudentialpurposes |