Showing 1 - 10 of 90
Using firm-level data, we provide evidence that, although monetary policy affects real investment, the effect operates differentially: the greater its export intensity the less a firm is affected by tight money. We examine several interpretations and conclude that the impact is transmitted...
Persistent link: https://www.econbiz.de/10005504673
We derive new estimates of total wealth, the returns on total wealth, and the wealth effect on consumption. We estimate the prices of aggregate risk from bond yields and stock returns using a no-arbitrage model. Using these risk prices, we compute total wealth as the price of a claim to...
Persistent link: https://www.econbiz.de/10011083953
The relative popularity of adjustable-rate mortgages (ARMs) and fixed-rate mortgages (FRMs) varies considerably both across countries and over time. We ask how movements in current and expected future interest rates affect the share of ARMs in total mortgage issuance. Using a nine-country panel...
Persistent link: https://www.econbiz.de/10011084239
A reduction in inflation can fuel run-ups in housing prices if people suffer from money illusion. For example, investors who decide whether to rent or buy a house by simply comparing monthly rent and mortgage payments do not take into account that inflation lowers future real mortgage costs. We...
Persistent link: https://www.econbiz.de/10005067397
Intra-day interest rates are zero. Consequently, a foreign exchange dealer can short a vulnerable currency in the morning, close this position in the afternoon, and never face an interest cost. This tactic might seem especially attractive in times of crisis, since it suggests an immunity to the...
Persistent link: https://www.econbiz.de/10005124023
This paper reviews the monetary transmission mechanism in low income countries (LICs). We use monetary transmission in advanced and emerging markets as a benchmark to identify aspects of the transmission mechanism that may operate differently in LICs. In particular, we focus on the effects of...
Persistent link: https://www.econbiz.de/10008466328
After a brief review of classical, Keynesian, New Classical and New Keynesian theories of macroeconomic policy, we assess whether New Keynesian Economics captures the quintessential features stressed by JM Keynes. Particular attention is paid to Keynesian features omitted in New Keynesian...
Persistent link: https://www.econbiz.de/10005504355
liquidity of their primary market, at the cost of reducing secondary market liquidity or even causing it to freeze. The degree … of transparency is inefficiently low if the social value of secondary market liquidity exceeds its private value. We … analyze various types of public intervention — mandatory transparency standards, provision of liquidity to distressed banks or …
Persistent link: https://www.econbiz.de/10005504512
they must deliver the asset they borrowed. That asset enjoys greater liquidity, measured by search times, and a higher … lending fee ('specialness'). Liquidity and specialness translate into price premia that are consistent with no-arbitrage. We …
Persistent link: https://www.econbiz.de/10005504616
This Paper investigates the impact of ownership patterns on the way the firm is monitored, on the liquidity of its … selection discount required by less informed investors to trade, reducing the firm’s liquidity. Both effects are properly … prices, but the lower liquidity induced by their presence tends to reduce prices. …
Persistent link: https://www.econbiz.de/10005497985