financial crisis, financial models, risk management, Monetary and fiscal policy
Implications of the financial crisis for models in monetary policy

This paper investigates the role of monetary policy models in the crisis and finds that (i) it is likely that monetary policy contributed to the financial crisis and (ii) that an inappropriately narrow suite of models made this mistake easier. The core models currently used at prominent central banks were not designed to discover emergent financial fragility.

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Added by View user profileSonia Hossain on September 23, 2010