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This paper challenges the dominant model which was used to explain the chronic inflation process, as in Latin America in the seventies and eighties. Unlike the usual long term view we present a variant of the Barro and Gordon policy game model which is based on short term considerations in the...
Persistent link: https://www.econbiz.de/10005483264
This paper challenges the dominant model which was used to explain the chronic inflation process, as in Latin America in the seventies and eighties. Unlike the usual long term view we present a variant of the Barro and Gordon policy game model which is based on short term considerations in the...
Persistent link: https://www.econbiz.de/10009208195
We offer an explanation of why optimal policy under commitment requires weaker reaction to supply shock, reflected in the failure of the Taylor principle. This lesson seems to be prevalent among central banks and yet has been analyzed incomprehensively in the economic literature.
Persistent link: https://www.econbiz.de/10009146103
We propose a model in which the evolution of interest rate margin (markup) in banking is the outcome of two major components: (i) dynamic oligopolistic conduct and (ii) dynamics of market fundamentals. The model is specified such that oligopolistic dynamics are separated from the dynamics of...
Persistent link: https://www.econbiz.de/10005485057
We construct a dynamic neoclassical model of banking capital where the dynamics are governed by the process of financial capital accumulation and credit risk realizations in a structure where stylized banking characteristics are maintained. This is aimed at focusing on how the...
Persistent link: https://www.econbiz.de/10011006002
Persistent link: https://www.econbiz.de/10007726473
Persistent link: https://www.econbiz.de/10007615797
How long does it take for the stock of financial intermediation capital to return to its optimal, profit maximizing, level following a severe shock, and what is the mechanism that governs it? We introduce a dynamic neoclassical model of capital structure that is governed by the process of...
Persistent link: https://www.econbiz.de/10012720117
Persistent link: https://www.econbiz.de/10002381900
Persistent link: https://www.econbiz.de/10002381904