Monetary Policy with Liquidity Constrained Government Debt Markets

Modern monetary policy seeks to influence domestic macroeconomic outcomes, using actions in official Government debt markets. The effectiveness of this route is being challenged by reductions in the level of Government debt outstanding. Monetary policy is faced with the possibility of operating in alternative financial markets. The project will: Examine alternative markets for monetary policy operation. Examine the effects of alternatives on real economy outcomes. Develop a model of the economy which controls for global financial conditions - which has not been done before. Combine modern econometric techniques.