TY - JOUR
T1 - The monetary transmission mechanism
T2 - is it relevant for policy?
AU - Adao, Bernardino
AU - Correia, Isabel
AU - Teles, Pedro
PY - 2004
Y1 - 2004
N2 - We study environments with sticky prices, wages, or portfolios where it is feasible and optimal to use monetary policy to replicate the allocation under full flexibility. In these environments the optimal policy does not depend on the scope of the frictions. In this sense, the strength of the monetary transmission mechanism is irrelevant for the conduct of monetary policy. So, asymmetries in the strength of the transmission mechanisms do not impose a cost on a common policy.
AB - We study environments with sticky prices, wages, or portfolios where it is feasible and optimal to use monetary policy to replicate the allocation under full flexibility. In these environments the optimal policy does not depend on the scope of the frictions. In this sense, the strength of the monetary transmission mechanism is irrelevant for the conduct of monetary policy. So, asymmetries in the strength of the transmission mechanisms do not impose a cost on a common policy.
UR - http://www.scopus.com/inward/record.url?scp=38949194065&partnerID=8YFLogxK
U2 - 10.1162/154247604323068014
DO - 10.1162/154247604323068014
M3 - Article
AN - SCOPUS:38949194065
SN - 1542-4774
VL - 2
SP - 310
EP - 319
JO - Journal of the European Economic Association
JF - Journal of the European Economic Association
IS - 2-3
ER -
