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Farms, Fertiliser, and Financial Frictions [electronic resource]: Yields from a DSGE Model.

Author/Creator:
Walker, Sebastien
Publication:
Washington, D.C. : International Monetary Fund, 2017.
Format/Description:
Government document
Book
1 online resource (52 p.)
Series:
IMF eLibrary
IMF Working Papers
IMF Working Papers
Status/Location:
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Summary:
This paper develops a Dynamic Stochastic General Equilibrium (DSGE) model with a financial accelerator which captures key features of low-income countries (LICs). The predominance of supply shocks in LICs poses distinct challenges for policymakers, given the negative correlation between inflation and the output gap in the case of supply shocks. Our results suggest that: (1) in the face of a supply-side shock, the most desirable interest rate rule involves simply targeting current inflation and smoothing the policy interest rate; and (2) ignoring financial frictions when evaluating policy rules can be particularly problematic in LICs, where financial frictions loom especially large.
Notes:
Part of the IMF eLibrary collection.
Description based on print version record.
Contributor:
Walker, Sebastien
Other format:
Print Version: Walker, Sebastien Farms, Fertiliser, and Financial Frictions: Yields from a DSGE Model
ISBN:
1475595778
9781475595772
ISSN:
1018-5941
Publisher Number:
10.5089/9781475595772.001 doi
Access Restriction:
Restricted for use by site license.