Financial Intermediation and Monetary Policy in a Small Open Economy

Borradores de Economia
Número: 
531
Publicado: 
Clasificación JEL: 
E32, E44, E52, F41
Palabras clave: 
Financial intermediation, Small open economy, dynamic stochastic general equilibrium model, Monetary policy

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This paper analyses the role of a costly financial system in the transmission of monetary policy. The new-keynesian model for a small open economy is extended with a simple financial system based on Hamann and Oviedo (2006). The presence of the financial