Franklin

Portfolio Preference Uncertainty and Gains From Policy Coordination [electronic resource] Masson, Paul R..

Author/Creator:
Masson, Paul R.
Publication:
Washington, D.C. : International Monetary Fund, 1991.
Series:
IMF eLibrary
IMF Working Papers; Working Paper No. 91/64.
IMF Working Papers; Working Paper No. 91/64
Format/Description:
Government document
Book
1 online resource (26 p.)
Local subjects:
Bonds.
Central bank.
Domestic financial markets.
Equity market.
Equity markets.
Equity shares.
Financial institutions.
Financial market.
Financial markets.
Financial stability.
Financial system.
Inflation.
International monetary system.
Monetary authorities.
Monetary expansion.
Monetary fund.
Monetary policies.
Monetary policy.
Monetary stance.
Monetary system.
Money demand.
Money supplies.
Money supply.
Optimal monetary policy.
Stock index.
Stock market.
Stock market collapse.
Stock market crash.
Stock market indices.
Stock market prices.
Stock market volatility.
Stock markets.
Stock prices.
Tight monetary stance.
Canada.
United States.
Summary:
International macroeconomic policy coordination is generally considered to be made less likely—and less profitable—by the presence of uncertainty about how the economy works. The present paper provides a counter-example, in which increased uncertainty about portfolio preference of investors makes coordination of monetary policy more beneficial. In particular, in the absence of coordination monetary authorities may respond to financial market uncertainty by not fully accommodating demands for increased liquidity, for fear of bringing about exchange rate depreciation. Coordinated monetary expansion would minimize this danger. A theoretical model incorporating an equity market is developed, and the stock market crash of October 1987 is discussed in the light of its implications for monetary policy coordination.
Notes:
Description based on print version record.
Contributor:
Masson, Paul R.
Other format:
Print Version:
ISBN:
1451848463:
9781451848465
ISSN:
1018-5941
Publisher Number:
10.5089/9781451848465.001
Access Restriction:
Restricted for use by site license.
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