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The impact of monetary policy on stock market bubbles and trading behavior: Evidence from the lab

Fischbacher, Urs; Hens, Thorsten; Zeisberger, Stefan - In: Journal of Economic Dynamics and Control 37 (2013) 10, pp. 2104-2122

We investigate the effect of monetary policy on stock market bubbles and trading behavior in experimental asset markets. We introduce the possibility of investing in interest bearing bonds to the widely used laboratory asset market design of Smith et al. (1988). Treatment groups face a variable...

Persistent link: https://www.econbiz.de/10010682460

The Taylor principle fights back, Part II

Buffie, Edward F. - In: Journal of Economic Dynamics and Control 46 (2014) C, pp. 30-49

The existing literature holds that the Taylor principle often leads to indeterminacy in New Keynesian models that allow for capital accumulation and limited asset market participation. This conclusion is special, however, to the case of continuous full employment. When the assumption of perfect...

Persistent link: https://www.econbiz.de/10010906783

A quantitative analysis of optimal sustainable monetary policies

Sunakawa, Takeki - In: Journal of Economic Dynamics and Control 52 (2015) C, pp. 119-135

This study examines the quantitative properties of optimal sustainable monetary policies using a monetary model with a stabilization bias. As in Kurozumi (2008), the optimal sustainable policy is a strategy considered in the absence of commitment technologies; however it is implemented following...

Persistent link: https://www.econbiz.de/10011209204

Inferring monetary policy objectives with a partially observed state

Givens, Gregory E.; Salemi, Michael K. - In: Journal of Economic Dynamics and Control 52 (2015) C, pp. 190-208

Accounting for the uncertainty in real-time perceptions of the state of the economy is believed to be critical for monetary policy analysis. We investigate this claim through the lens of a New Keynesian model with optimal discretionary policy and partial information. Structural parameters are...

Persistent link: https://www.econbiz.de/10011209207

The role of financial intermediaries in monetary policy transmission

Beck, Thorsten; Colciago, Andrea; Pfajfar, Damjan - In: Journal of Economic Dynamics and Control 43 (2014) C, pp. 1-11

The recent financial crisis has stimulated theoretical and empirical research on the propagation mechanisms underlying business cycles, in particular on the role of financial frictions. Many issues concerning the interactions between banking and monetary policy forced policy makers to redefine...

Persistent link: https://www.econbiz.de/10010871053

On the long-run relationship between inflation and output in a spatial overlapping generations model

Anthonisen, Niels - In: Journal of Economic Dynamics and Control 37 (2013) 12, pp. 2500-2524

-state distribution of output across the economy. A steady-state of the model entails a stationary distribution of money across the … locations of the economy. With all else held fixed, a change in the rate of money-growth induces a change in the distribution of … money, which leads to a change in labour supply and production throughout the economy. Thus the distribution of money …

Persistent link: https://www.econbiz.de/10010719551

The evolution of monetary policy rules

Sargent, Thomas J. - In: Journal of Economic Dynamics and Control 49 (2014) C, pp. 147-150

, considering in particular how these relate to proposals made by Milton Friedman and Walter Bagehot. The lines between money and …

Persistent link: https://www.econbiz.de/10011117352

Demand for cash with intra-period endogenous consumption

Bar-Ilan, Avner; Marion, Nancy - In: Journal of Economic Dynamics and Control 37 (2013) 12, pp. 2668-2678

We extend the literature on the demand for money by relaxing the assumption of a constant rate of consumption. Although … the period to minimize the cost of money management. Consistent with empirical evidence, we find that agents do not smooth …

Persistent link: https://www.econbiz.de/10010719563

Understanding the accumulation of bank and thrift reserves during the U.S. financial crisis

Chang, Su-Hsin; Contessi, Silvio; Francis, Johanna L. - In: Journal of Economic Dynamics and Control 43 (2014) C, pp. 78-106

The level of aggregate excess reserves held by U.S. depository institutions increased significantly at the peak of the 2007–2009 financial crisis. Although the amount of aggregate reserves is determined almost entirely by the policy initiatives of the central bank that act on the asset side of...

Persistent link: https://www.econbiz.de/10010871045

Why Do U.S. Firms Hold so Much More Cash than They Used to?

Bates, Thomas W. - 2010

The average cash to assets ratio for U.S. industrial firms increases by 129% from 1980 to 2004. Because of this increase in the average cash ratio, American firms at the end of the sample period can pay back their debt obligations with their cash holdings, so that the average firm has no...

Persistent link: https://www.econbiz.de/10012760630