Should one think of zero nominal interest rates as an undesirable liquidity trap or as the desirable Friedman rule? I use three different frameworks to discuss this issue. First, I restate Cole and Kocherlakota's (1998) analysis of Friedman's rule: short run increases in the money stock -...

This paper develops a model of the choice between bank and market finance by entrepreneurial firms that differ in the value of their net worth. The monitoring associated with bank finance ameliorates a moral hazard problem between the entrepreneurs and their lenders. The model is used to analyze...

With the use of non-traditional policy tools, the level of reserve balances has risen in the US from roughly $20 billion before the financial crisis to well past $1 trillion. The effect of reserve balances in macroeconomic models often comes through the money multiplier, affecting the money...

This paper surveys recent advances in empirical studies of the monetary transmission mechanism (MTM), with special attention to Central and Eastern Europe (CEE). Our results indicate that the strength of the exchange rate pass-through substantially declined over time mainly due to a fall in...

This Paper examines the consequences of interactions between the bank lending channel and the traditional interest rate and exchange rate channels on the effectiveness of the monetary policy transmission in Poland since 1994. First, we develop a small open-economy credit-augmented model. Under...

Meltzer (1999a) shows that real monetary base growth is a significant determinant of consumption growth in the United States, controlling for the short-term real interest rate. In this paper, I show that the same property of base money holds for total output (relative to trend or potential) in...

Macroeconomics remains in a parlous condition, largely because it has assumed away all financial frictions. Ultimately these latter depend on the possibility that borrowers might default on their repayments. Without default, there is no real role for most financial intermediations, collateral,...

We examine the impact of large scale asset purchase announcements of government bonds on real GDP and the CPI in the United Kingdom and the United States with a Bayesian VAR, estimated on monthly data from 2009M3 to 2014M5. We identify an asset purchase announcement shock with four different...

Bu çalışmanın amacı, Keynes’in Finans Motifiyle Para Talebi Kuramı’yla iktisat yazınına yaptığı katkıları ve başlayan yeni tartışmaları incelemektir. Keynes, 1937 yılında yayımladığı çalışmalarında, yatırım harcamaları henüz tamamlanmadan ve bu harcamalar...

Central banks have responded with exceptional vigour to the crisis by using their traditional interest-rate tools to their limits and deploying a wide range of unconventional measures. This paper documents these responses in a systematic way, reviews the evidence about their impact, and...