Government Policy, Credit Markets and Economic Activity / Lawrence Christiano, Daisuke Ikeda.

Format:

Book

Author/Creator:

Christiano, Lawrence.

Contributor:

National Bureau of Economic Research.

Ikeda, Daisuke.

Series:

Working Paper Series (National Bureau of Economic Research) no. w17142.

NBER working paper series no. w17142

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2011.

Summary:

The US government has recently conducted large scale purchases of assets and implemented policies that reduced the cost of funds to financial institutions. Arguably these policies have helped to correct credit market dysfunctions, allowing interest rate spreads to shrink and output to begin a recovery. We study four models of financial frictions which explore different channels by which these effects might have occured. Recent events have sparked a renewed interest in leverage restrictions and the consequences of bailouts of the creditors of banks with under-performing assets. We use two of our models to consider the welfare and other effects of these policies.

Notes:

Print version record

June 2011.