Breaking the spell with credit-easing: Self-confirming credit crises in competitive search economies

Autor:	Gaetano Gaballo, Ramon Marimon
Rok vydání:	2021
Předmět:	Economics and Econometrics Intervention (law) High interest Economy 0502 economics and business 05 social sciences Policy maker Economics Spell Subsidy 050207 economics Finance 050205 econometrics
Zdroj:	Journal of Monetary Economics. 119:1-20
ISSN:	0304-3932
DOI:	10.1016/j.jmoneco.2021.01.007
Popis:	In self-confirming crises lenders charge high interest rates wrongly believing that lower rates would generate losses. In a directed-search economy, misperceptions can persist because there is no equilibrium evidence that can confute it, preventing constrained-efficiency. A policy maker with the same beliefs as lenders will find it optimal to offer a contingent subsidy to induce lower market rates. As lenders price assets in response to this policy, new information may disprove misperceptions and restore efficiency. New micro-evidence suggests that the 2009 TALF intervention in the market of newly generated ABS was an example of the optimal policy in our model.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::40731123164e8b0ff9dc75234d62c4bd https://doi.org/10.1016/j.jmoneco.2021.01.007 Zobrazit plný text záznamu Full Text from ScienceDirect