Choudhary, M. Ali and Hanif, M. Nadim and Khan, Sajawal and Rehman, Muhammad (2010): Procyclical Monetary Policy and Governance.
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Weak governance adversely affects firm’s net worth and consequently the value of its collateral. This negative impact on the collateral reduces the external credit available for importing inputs constraining potential output. As a result, a stronger procyclical monetary policy stance is adopted for protecting the exchange rate and hence arresting the degradation in the collateral constraint.
|Item Type:||MPRA Paper|
|Original Title:||Procyclical Monetary Policy and Governance|
|Keywords:||Collateral Constraints; Governance; Monetary Policy|
|Subjects:||F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance
O - Economic Development, Technological Change, and Growth > O1 - Economic Development
E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit
|Depositing User:||Nadim Hanif|
|Date Deposited:||27. Nov 2010 08:49|
|Last Modified:||13. Feb 2013 00:50|
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