Arvind Krishnamurthy

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Recent Commentary

Passthrough Efficiency in the Fed’s New Monetary Policy Setting

by Darrell Duffie, Arvind Krishnamurthyvia Jackson Hole Symposium of the Federal Reserve Bank of Kansas City
Tuesday, August 30, 2016

We show how the current institutional setting of U.S.-dollar money markets limits the passthrough effectiveness of the Federal Reserve’s monetary policy. We focus on frictions associated with imperfect competition, regulation, infrastructure, and other forms of institutional segmentation within money markets. We model how imperfect competition is exacerbated by costs to cash investors associated with search and information attention. Bloomberg radio interview (audio).