Must-Read: Stefan Laseen et al.: Systemic Risk: A New Trade-off for Monetary Policy?: “We introduce time-varying systemic risk in an otherwise standard New-Keynesian model… …to study whether a simple leaning-against-the-wind policy can reduce systemic risk and improve welfare. We find that an unexpected increase in policy rates reduces output, inflation, and asset prices without fundamentally … Continue reading Must-Read: Stefan Laseen et al.: Systemic Risk: A New Trade-off for Monetary Policy?