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If leverage is unregulated (for example, because of the presence of a shadow banking system), then the optimal monetary policy seeks to contain such socially costly leveraged payouts by stimulating investment in response to adverse shocks only up to a level below the first best. The optimal monetary policy may even consist of leaning against the wind, that is, not stimulating the economy at all, in order to fully contain leveraged payouts and maintain productive efficiency. <\/jats:p><jats:p> This paper was accepted by Tomasz Piskorski, finance. <\/jats:p><jats:p> Supplemental Material: The online appendix and data files are available at https:\/\/doi.org\/10.1287\/mnsc.2022.01440 . <\/jats:p>","DOI":"10.1287\/mnsc.2022.01440","type":"journal-article","created":{"date-parts":[[2025,1,13]],"date-time":"2025-01-13T07:03:19Z","timestamp":1736751799000},"page":"7907-7928","source":"Crossref","is-referenced-by-count":3,"title":["Monetary Easing, Leveraged Payouts, and Lack of Investment"],"prefix":"10.1287","volume":"71","author":[{"ORCID":"https:\/\/orcid.org\/0000-0002-8925-4239","authenticated-orcid":false,"given":"Viral","family":"Acharya","sequence":"first","affiliation":[{"name":"Center for Economic Policy Research, London EC1, United Kingdom; and New York University, New York, New York 10012; and National Bureau of Economic Research, Cambridge, Massachusetts 02138"}]},{"given":"Guillaume","family":"Plantin","sequence":"additional","affiliation":[{"name":"Center for Economic Policy Research, London EC1, United Kingdom; and Sciences Po, 75007 Paris, France"}]}],"member":"109","reference":[{"key":"B1","doi-asserted-by":"publisher","DOI":"10.1257\/aer.20190150"},{"key":"B2","doi-asserted-by":"publisher","DOI":"10.1093\/acprof:osobl\/9780199844333.003.0009"},{"key":"B3","doi-asserted-by":"publisher","DOI":"10.1016\/j.jfineco.2012.05.014"},{"key":"B4","doi-asserted-by":"publisher","DOI":"10.1016\/j.jfineco.2015.08.008"},{"key":"B5","doi-asserted-by":"publisher","DOI":"10.1111\/1540-6261.00414"},{"key":"B6","doi-asserted-by":"publisher","DOI":"10.1257\/aer.102.6.3004"},{"key":"B7","doi-asserted-by":"publisher","DOI":"10.1016\/j.jacceco.2003.10.006"},{"key":"B9","doi-asserted-by":"publisher","DOI":"10.1016\/j.jfineco.2022.03.001"},{"key":"B10","doi-asserted-by":"publisher","DOI":"10.1016\/j.jfineco.2004.07.004"},{"key":"B11","doi-asserted-by":"publisher","DOI":"10.1016\/S0304-405X(01)00068-X"},{"key":"B14","doi-asserted-by":"publisher","DOI":"10.1093\/restud\/rdad039"},{"key":"B15","doi-asserted-by":"publisher","DOI":"10.1257\/jep.36.3.29"},{"key":"B16","doi-asserted-by":"publisher","DOI":"10.1016\/j.jet.2013.06.002"},{"key":"B17","doi-asserted-by":"publisher","DOI":"10.1086\/666669"},{"key":"B18","doi-asserted-by":"publisher","DOI":"10.1016\/j.jfineco.2007.11.007"},{"key":"B21","doi-asserted-by":"publisher","DOI":"10.1257\/aer.102.1.60"},{"key":"B23","doi-asserted-by":"publisher","DOI":"10.1016\/j.jfineco.2016.07.002"},{"key":"B25","doi-asserted-by":"publisher","DOI":"10.1016\/j.jfineco.2019.03.006"},{"key":"B26","volume-title":"Prices and Production","author":"Hayek FA","year":"1931"},{"key":"B27","doi-asserted-by":"publisher","DOI":"10.2307\/3003320"},{"key":"B28","doi-asserted-by":"publisher","DOI":"10.1016\/j.jacceco.2005.10.002"},{"key":"B29","doi-asserted-by":"publisher","DOI":"10.1016\/0304-405X(95)00826-Z"},{"key":"B30","doi-asserted-by":"publisher","DOI":"10.1016\/0022-0531(90)90066-S"},{"key":"B34","doi-asserted-by":"publisher","DOI":"10.1016\/j.jfineco.2021.06.020"},{"key":"B35","doi-asserted-by":"publisher","DOI":"10.1016\/S0304-3932(01)00055-1"},{"key":"B36","doi-asserted-by":"publisher","DOI":"10.1111\/jofi.12837"},{"key":"B37","doi-asserted-by":"publisher","DOI":"10.3982\/ECTA14057"},{"key":"B40","doi-asserted-by":"publisher","DOI":"10.1016\/0304-405X(77)90015-0"},{"key":"B41","doi-asserted-by":"publisher","DOI":"10.1016\/j.jfineco.2016.03.011"},{"key":"B42","doi-asserted-by":"publisher","DOI":"10.1093\/rfs\/hhn024"},{"key":"B45","doi-asserted-by":"publisher","DOI":"10.1093\/qje\/qjr054"},{"key":"B47","doi-asserted-by":"publisher","DOI":"10.1016\/j.jfineco.2019.08.003"},{"key":"B48","doi-asserted-by":"publisher","DOI":"10.1016\/0304-405X(81)90011-8"},{"key":"B49","doi-asserted-by":"crossref","unstructured":"Wang O (2019) Banks, low interest rates, and monetary policy transmission. 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