Recent Publications

Paper Link Xiaojun Wang and Chi-Young Choi: Discontinuity of Output Convergence Within the United States: Why Has the Course Changed?, Economic Inquiry, January 2015.

Paper Link Miriam Bruhn and Inessa Love: The Real Impact of Improved Access to Finance: Evidence from Mexico, Journal of Finance, June 2014

Paper Link Ronald Lee, Andrew Mason, and members of the NTA network : Is Low Fertility Really a Problem? Science, 10 October 2014.


Date: Friday, September 2, 2016, at 3:00 pm.
Room: Saunders 515
Title: Optimal Policy in a New Keynesian Economy with Credit Market Search
Speaker: Yuki Teranishi
Institution: Keio University

We introduce a frictional credit market with search and matching process into a standard New Keynesian model with nominal rigidities in the goods market, and then investigate optimal policy under financial frictions. We show that a second-order approximation of social welfare includes terms for credit, in addition to terms for inflation and consumption, so that any optimal policy must hold responsibility for financial stability as well as price stability. We highlight this issue by considering several tools for monetary and macroprudential policy. We find that the optimal monetary policy requires keeping the credit market countercyclical against the real economy. Also, the optimal macroprudential policy, which poses constraints on supply and demand sides of credit, reduces excessive variations in lending and contributes to both financial and price stabilities.

Seminar in Energy and Environmental Policy

Schedule will be updated in early September

Applied Microeconomics Workshop

Schedule will be updated in early September

Game Theory Workshop

Schedule will be updated in early September