Monetary Policy in Financial Economies

Abstract

This dissertation explores a critical question that arose naturally as a consequence of the Great Recession: What is the appropriate role for and design of monetary policy in financial economies? In addition to analyzing the unprecedented actions taken by policy makers in the wake of the worst Financial Crisis since the Great Depression, I also examine how conventional monetary policy instruments should be designed and implemented in New-Keynesian economies - the workhorse model of monetary policy for central banks.