Goodhart, Charles, Sunirand, P. and Tsomocos, D. P. (2009) The optimal monetary instrument for prudential purposes. Journal of Financial Stability, 7 (2). pp. 70-77. ISSN 1572-3089
Abstract
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.
| Item Type: | Article |
|---|---|
| Official URL: | http://www.sciencedirect.com/science/journal/15723... |
| Library of Congress subject classification: | H Social Sciences > HG Finance |
| Sets: | Research centres and groups > Financial Markets Group (FMG) |
| Date Deposited: | 06 Apr 2011 15:12 |
| URL: | http://eprints.lse.ac.uk/30264/ |
Actions (login required)
 |
Record administration - authorised staff only |
