OPTIMAL COMBINATION MONETARY POLICIES: A TWO-STAGE PROCESS.

This article presents a note on the paper "Optimal Combination Monetary Policies: A Two-Stage Process." The authors present a model to reexamine an issue with this paper. Their findings suggest that a two-stage form of monetary policy is optimal. They examine the impact that adjustments to the bond rate has on the real sector. They note that their model is only relevant in cases that where there is a class of financial market shocks without direct impact on the real sector. They also provide information on neutralizing these shocks.