Optimal monetary policy and the timing of asset trade in open economies

Senay, Ozge
Sutherland, Alan
This paper analyses the timing of asset trade and its implications for monetary policy and welfare in open economies. Optimal policy is shown to differ significantly depending on whether asset trade takes place before or after policy decisions are made.


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Measuring the monetary policy stance of central banks is a much-debated issue in the literature. The changing economic dynamics over the time and different structures of economies have made impossible to use only short term interest rates, monetary aggregates or money market rates for analyzing the monetary stance. Accordingly, comprehensive monetary conditions indexes have been discovered and some central banks have started to use them as an operational target. In line with these developments, the main aim...
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Citation Formats
O. Senay and A. Sutherland, “Optimal monetary policy and the timing of asset trade in open economies,” ECONOMICS LETTERS, pp. 297–302, 2007, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/65530.