We provide a theory of the limits to monetary policy independence in open economies arising from the interaction between capital flows and domestic collateral constraints. The key feature of our ...

Indeed, the Federal Reserve’s expansionary monetary policy – which has been in place since the beginning of the financial crisis – has arguably put the US economy on the road to recovery. Focused on ...

This paper investigates the impact of monetary policy on capital misallocation, focusing on its heterogeneous effects on firms. Using Spanish firm-level data spanning 1999 to 2019, we demonstrate that ...

Dovish (or accommodative) policy, is the opposite of hawkish and favors expansionary monetary policy to achieve maximum levels of employment. The Fed does this by lowering the Fed Funds rate.

Monetary policy describes the ways in which the central banks change the money supply in order to accomplish certain economic objectives. In the U.S. this is done by the Federal Reserve.

Monetary policy is either expansionary (mainly by lowering interest rates to combat a recession or a recessionary situation) or contractionary (raising interest rates to control inflation).