The purpose of this paper is to study the determinants of equilibrium in the market for daily funds. We use the EONIA panel database which includes daily information on the lending rates applied by contributing commercial banks. The data clearly show an increase in both the time series...

Empirical support for the conventional notion that short-term investment is hot money and direct investment is not: short-term investment appears to respond more dramatically to disturbances in other capital flows and in other countries than does direct investment.Chuhan, Perez-Quiros, and...

We find that the composite leading index (CLI) is useful forforecasting GNP, both in sample and in an out-of-sample real-time exercise. We propose a nonlinear specification in which cyclical shifts of the CLI precede those in GNP. However, we find that better forecasts are provided by a simple...

This paper analyzes the role of standing facilities in the determination of the demand for reserves in the overnight money market. The paper shows how central banks could use the position of the main refinancing rate with respect to the deposit and lending rates as a policy tool to control the...

The objective of this paper is to examine the predictability of the monetary policy decisions of the Governing Council of the ECB and the transmission of the unexpected component of the monetary policy decisions to the yield curve. We find, using new methodologies, that markets do not fully...