dc.contributor.author | Damjanovic, Tatiana | |
dc.contributor.author | Girdenas, Sarunas | |
dc.date.accessioned | 2015-03-16T09:49:16Z | |
dc.date.issued | 2014-06-05 | |
dc.description.abstract | We study monetary optimal policy in a New Keynesian model at the zero bound
interest rate where households use cash alongside house equity borrowing to conduct
transactions. The amount of borrowing is limited by a collateral constraint. When either
the loan to value ratio declines or house prices fall, we observe a decrease in the money
multiplier. We argue that the central bank should respond to the fall in the money
multiplier and therefore to the reduction in house prices or the loan to collateral value
ratio. We also find that optimal monetary policy generates a large and persistent fall in
the money multiplier in response to the drop in the loan to collateral value ratio. | en_GB |
dc.identifier.citation | Vol. 45, pp. 146 - 164 | en_GB |
dc.identifier.doi | 10.1016/j.jedc.2014.05.013 | |
dc.identifier.uri | http://hdl.handle.net/10871/16547 | |
dc.language.iso | en | en_GB |
dc.publisher | Elsevier | en_GB |
dc.subject | optimal monetary policy | en_GB |
dc.subject | zero lower bound | en_GB |
dc.subject | quantitative easing | en_GB |
dc.subject | money multiplier | en_GB |
dc.subject | loan to value ratio | en_GB |
dc.subject | collateral constraint | en_GB |
dc.subject | house prices | en_GB |
dc.title | Quantitative easing and the loan to collateral value ratio | en_GB |
dc.type | Article | en_GB |
dc.date.available | 2015-03-16T09:49:16Z | |
dc.identifier.issn | 0165-1889 | |
dc.description | NOTICE: this is the author’s version of a work that was accepted for publication in Journal of Economic Dynamics and Control. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Economic Dynamics and Control, Volume 45, August 2014, Pages 146–164. doi:10.1016/j.jedc.2014.05.013 | en_GB |
dc.description | Based in part on second author's doctoral dissertation, 2014 http://hdl.handle.net/10871/16503 | en_GB |
dc.identifier.journal | Journal of Economic Dynamics and Control | en_GB |