Optimal monetary interventions in credit markets

• 成果类型: Article
• 署名作者: Araujo, Luis; Hu, Tai-Wei
• 署名单位: Michigan State University; Getulio Vargas Foundation; University of Bristol
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2018.10.005
• 发表日期: 2018
• 页码: 455-487
• 关键词: money; credit; limited commitment; optimal monetary policy; mechanism design; inflation

摘要

We characterize optimal credit market interventions with respect to two fundamental frictions limited commitment and limited monitoring. We consider two classes of interventions: an inflationary policy which uses inflation tax to forgive private debt, and a deflationary policy which uses credit tax to increase the real rate of return on money. We show that both money and debt are essential and that intervention is generically optimal. The nature of the optimal intervention depends on the fundamentals of the economy and we provide conditions under which the optimal intervention is inflationary and under which it is deflationary. Our results hold irrespective of whether we use a bargaining protocol or optimal trading mechanisms. (C) 2018 Elsevier Inc. All rights reserved.