Essays on uncertainty, monetary policy and financial stability
In the first chapter, I examine both theoretically and empirically how income uncertainty affects the effectiveness of monetary policy. I consider income risk from potential unemployment, and find that monetary policy has a smaller influence on aggregate demand when unemployment risk is high. I buil...
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| Formato: | tesis doctoral |
| Estado: | Versión publicada |
| Fecha de publicación: | 2016 |
| País: | España |
| Recursos: | CBUC, CESCA |
| Repositorio: | TDR. Tesis Doctorales en Red |
| OAI Identifier: | oai:www.tdx.cat:10803/393734 |
| Acesso em linha: | http://hdl.handle.net/10803/393734 |
| Access Level: | acceso abierto |
| Palavra-chave: | Monetary policy Central bank Financial crisis Uncertainty Financial stability Interest rate Unemployment Polítiques monetàries Banc central Crisi financera Incertesa Estabilitat financera Tipus d'interès Desocupació 33 |
| Resumo: | In the first chapter, I examine both theoretically and empirically how income uncertainty affects the effectiveness of monetary policy. I consider income risk from potential unemployment, and find that monetary policy has a smaller influence on aggregate demand when unemployment risk is high. I build on the fact that saving arising from a precautionary motive has a smaller interest elasticity. As a consequence, aggregate demand reacts less to the interest rate when uncertainty is high. The second chapter links the build-up of financial risk that led to the recent financial crisis to the preceding period of exceptionally low macroeconomic volatility. The degree of stability that a country has enjoyed before 2007 predicts robustly how much it suffered from the crisis, a result that also holds for individual firms. In the final chapter, I connect this period of low volatility to the conduct of monetary policy. Building on a stylized model, I show empirically that monetary policy may have been `too successful' in stabilizing inflation, as this has contributed to excessive financial risk taking. |
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