Financial stability, wealth effects and optimal macroeconomic policy combination in the United Kingdom: A new-Keynesian dynamic stochastic general equilibrium framework
| Autor: | Alaa M. Soliman, Muhammad Ali Nasir, Milton Yago, JunJie Wu |
|---|---|
| Rok vydání: | 2016 |
| Předmět: |
Macroeconomics
Economics and Econometrics Financial stability wealth effects lcsh:Finance lcsh:HG1-9999 0502 economics and business ddc:330 Dynamic stochastic general equilibrium New Keynesian economics Economics financial markets G12 optimal policy 050207 economics C11 Stock (geology) 050208 finance lcsh:Economic theory. Demography 05 social sciences Financial market Bayesian estimation lcsh:HB1-3840 E61 NK-DSGE model nk-dsge model E44 Portfolio Finance bayesian estimation Financial sector |
| Zdroj: | Cogent Economics & Finance, Vol 4, Iss 1 (2016) |
| ISSN: | 2332-2039 |
| DOI: | 10.1080/23322039.2015.1136098 |
| Popis: | This study derives an optimal macroeconomic policy combination for financial sector stability in the United Kingdom by employing a New Keynesian Dynamic Stochastic General Equilibrium (NK-DSGE) framework. The empirical results obtained show that disciplined fiscal and accommodative monetary policies stance is optimal for financial sector stability. Furthermore, fiscal indiscipline countered by contractionary monetary stance adversely affects financial sector stability. Financial markets, e.g. stocks and Gilts show a short-term asymmetric response to macroeconomic policy interaction and to each other. The asymmetry is a reflection of portfolio adjustment. However in the long-run, the responses to suggested optimal policy combination had homogenous effects and there was evidence of co-movement in the stock and Gilt markets. |
| Databáze: | OpenAIRE |
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