Hidden Bibliographic Details
| Varying Form of Title: | Title from p. 2 of pdf: Financial friction in data, evidence and impact
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| Other authors / contributors: | Gelain, Paolo, author.
Sanjani, Marzie Taheri, author.
International Monetary Fund. European Department, issuing body.
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| ISBN: | 9781498378895
1498378897
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| Notes: | "European Department"--Page 2 of pdf.
"July 2014"--Page 2 of pdf.
Includes bibliographical references (pages 35-40).
Online resource; title from pdf title page (IMF.org Web site, viewed July 21, 2014).
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| Summary: | "The recent global financial crisis illustrates that financial frictions are a significant source of volatility in the economy. This paper investigates monetary policy stabilization in an environment where financial frictions are a relevant source of macroeconomic fluctuation. The authors derive a measure of output gap that accounts for frictions in financial market. Furthermore they illustrate that, in the presence of financial frictions, a benevolent central bank faces a substantial trade-off between nominal and real stabilization; optimal monetary policy significantly reduces fluctuations in price and wage inflations but fails to alleviate the output gap volatility. This suggests a role for macroprudential policies."--Abstract.
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