Financial frictions, monetary policy and business cycles
- This dissertation consists of three essays, which study the implication of financial frictions in business cycles and monetary policy making. The first essay develops a Dynamic Stochastic General Equilibrium (DSGE) model to study how the instability of the banking sector can amplify and propagate business cycles. Model simulations show that in an economic down turn, in addition to credit demand contraction induced by low firm net worth, low bank capital position can create strong credit supply contraction, and have a quantitatively significant effect on business cycle dynamics. The second essay studies the optimal Taylor-type monetary policy rules based on the model developed in the first chapter and find that with interest rate smoothing, 'leaning against the wind' can significantly dampen the procyclicality of financial distortions, and increase the welfare of the economy. The third chapter examines the role of households frugality in a financial crisis and finds that higher savings by more frugal households provide an important cushion for the fall in private investment funding.
Author: | Longmei Zhang |
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URN: | urn:nbn:de:hebis:30:3-230650 |
Referee: | Stefan Gerlach, Thomas LaubachGND, Christian SchlagORCiDGND |
Document Type: | Doctoral Thesis |
Language: | English |
Date of Publication (online): | 2011/10/26 |
Year of first Publication: | 2011 |
Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
Granting Institution: | Johann Wolfgang Goethe-Universität |
Date of final exam: | 2011/10/20 |
Release Date: | 2011/10/26 |
Page Number: | 80 |
HeBIS-PPN: | 281737479 |
Institutes: | Wirtschaftswissenschaften / Wirtschaftswissenschaften |
Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
Sammlungen: | Universitätspublikationen |
Licence (German): | Deutsches Urheberrecht |