Financial Frictions and Optimal Monetary Policy in a Small Open Economy

Borradores de Economia
Number: 
852
Published: 
Classification JEL: 
E44, E50, E52, E58, F41
Keywords: 
Human capital agglomeration, Social returns, Private returns, Externalities, Uncertainty, Fiscal policy
Download document

The most recent

Payroll Subsidies for SMEs in Informal Labor Markets
Leonardo Fabio Morales, Leonardo Bonilla-Mejía, Didier Hermida-Giraldo, Francisco Javier Lasso-Valderrama, José Pulido
Using online vacancy posts to analyze the return to skills and knowledge in the formal labor market
Leonardo Fabio Morales, Juan Chaparro-Cardona, Eleonora Dávalos, Nataly Corredor-Martinez
Global risk transmission to local financial conditions and the participation of foreign investors in Emerging Market Economies’ sovereign bond markets: The case of Colombia
Oscar Botero-Ramírez, Andrés Murcia, Hernando Vargas-Herrera

In this paper we set up a small open economy model with financial frictions, following Curdia and Woodford (2010)’s model. Unlike other results in the literature such as Curdia and Woodford (2010), McCulley and Ramin (2008) and Taylor (2008), we find that