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From a macroeconomic perspective, the shortterm interest rate is a policy instrument under
the direct control of the central bank, which
adjusts the rate to achieve its economic stabilzation goals. ...
The Macroeconomics of Financial Crises: How Risk Premiums and Liquidity Traps Affect Policy Options
Financial crisis Credit crunch Liquidity trap Risk premiums Policy options Fiscal policy Monetary policy
2011/8/21
The paper offers an overview of what structural models of the IS-LM and Mundell-Fleming variety can tell about the macroeconomics of economic crises. In addition to demonstrating how the emergence of ...