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Pré-publication, Document de travail Année : 2017

The Corridor's Width as a Monetary Policy Tool

Résumé

Credit institutions borrow liquidity from the central bank’s lending facility and deposit (excess) reserves at its deposit facility. The central bank directly controls the corridor: the non-market interest rates of its lending and deposit facilities. Modifying the corridor changes the conditions on the interbank market and allows the central bank to set the short-term interest rate in the economy. This paper assesses the use of the corridor’s width as an additional tool for monetary policy. Results indicate that a symmetric widening of the corridor boosts output and welfare while addressing the central bank’s concerns over higher risk-taking in the economy.
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Dates et versions

halshs-01611650, version 1 (06-10-2017)

Identifiants

  • HAL Id : halshs-01611650 , version 1

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Guillaume A. Khayat. The Corridor's Width as a Monetary Policy Tool. 2017. ⟨halshs-01611650⟩
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Dernière date de mise à jour le 16/06/2024
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