Monetary Transaction Costs and the Term Premium

WP/13/85

Nopic
We show that, in a monetary equilibrium, trade and asset prices depend on both the supply of the liquidity by the Central Bank and the liquidity of assets and commodities. As a result, monetary aggregates are informative for the conduct of monetary policy. We also show asset prices are higher in liquidity-constrained states of nature. This... READ MORE...

Publication date: April 2013
ISBN 9781484392331
$18.00

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Publication date: April 2013

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Publication date: April 2013

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