AEAweb: Journal Article Full-Text Access
Note to Institutional Subscribers: If you normally access AEAweb journal content via your university or firm's subscription and receive this page, please click
here. The most likely causes of this are a recently changed IP address, a new subscription, or the renewal of a lapsed institutional subscription. This page will stop appearing on the next synchronisation of the document delivery and authentication systems.
You may also click here for pay-per-view, Athens login and other access options .
AEA Members, please click the button below to access the login form:
De Fiore, Fiorella,
Pedro Teles, and
Oreste Tristani. 2011. "Monetary Policy and the Financing of Firms."
,
3(4): 112-42.
Show Article Details
DOI: 10.1257/mac.3.4.112
Abstract:How should monetary policy respond to changes in financial conditions? We consider a simple model where firms are subject to shocks which may force them to default on their debt. Firms' assets and liabilities are nominal and predetermined. Monetary policy can
therefore affect the real value of funds used to finance production. In
this model, allowing for inflation volatility in response to aggregate
shocks can be optimal; the optimal response to adverse financial shocks is to lower interest rates and to engineer some inflation; and the Taylor rule may implement allocations that have opposite cyclical properties to the optimal ones. (JEL G32, E31, E43, E44, E52)
Additional links:
Download Data Set
Authors:
De Fiore, Fiorella (European Central Bank)
Teles, Pedro (Bank of Portugal and Portuguese Catholic U)
Tristani, Oreste (European Central Bank)
JEL Classifications:
E31: Price Level; Inflation; Deflation
E43: Interest Rates: Determination, Term Structure, and Effects
E44: Financial Markets and the Macroeconomy
E52: Monetary Policy
G32: Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure
If you are an AEA member and do not have an AEAweb login, please
click here.
If you would like to become an AEA member, please see our
membership page.
If you arrived at this page via a journal article link, you will be redirected to the pdf after successful login.
If your first login attempt fails, and you have recently signed up for access or have recently changed your password, you may need to wait a few moments and try again.
Please contact us at
notify@aeaweb.org with any problems or questions.
Contents of Current Issues
May 2013 AER
Spring 2013 JEP
May 2013 AEJ: Policy
May 2013 AEJ: Micro
April 2013 AEJ: Macro
April 2013 AEJ: Applied
March 2013 JEL
Virtual Field Journals
In the News:
The Huffington Post reports on a study addressing the influence of lifestyle factors on shrinking height in the elderly published in the April issue of AEJ: Applied Economics.
Michael Frakes' (Cornell Law School) article on medical liability standards from the February issue of the American Economic Review was discussed as part of a Bloomberg opinion piece on medical malpractice.
Slate Magazine recently discussed former AEA president, George Akerlof's classic behavioral research and a 2012 American Economic Review study conducted by German and Swiss researchers to explore how gifting can motivate some employees more than cash incentives do in the workplace.
Contact Us
