Showing 1 - 10 of 341
In this paper, we develop an endogenous growth model with financial intermediation to examine the effects of financial repression on growth, inflation, and welfare. By limiting the liquidity provision, binding reserve requirements always suppress economic growth while their effect on inflation...
Persistent link: https://www.econbiz.de/10012753113
An important theoretical literature motivates collateral as a mechanism that mitigates adverse selection, credit rationing, and other inefficiencies that arise when borrowers hold ex ante private information. There is no clear empirical evidence regarding the central implication of this...
Persistent link: https://www.econbiz.de/10012709533
We test the implications of Flannery's (1986) and Diamond's (1991) models concerning the effects of risk and asymmetric information in determining debt maturity, and we examine the overall importance of informational asymmetries in debt maturity choices. We employ data on over 6,000 commercial...
Persistent link: https://www.econbiz.de/10012710153
This paper analyzes multiple reserve requirements of the type that have been imposed by a number of developing countries. We show that previous theoretical work on this topic has not succeeded in providing a social welfare rationale for the existence of multiple reserve requirements: in the...
Persistent link: https://www.econbiz.de/10012752981
A number of developing countries have adopted deficit- finance regimes involving multiple reserve requirements. One question the previous literature on this phenomenon has not addressed is whether multiple-reserves regimes can improve on regimes involving single-currency-reserve requirements if...
Persistent link: https://www.econbiz.de/10012753112
Persistent link: https://www.econbiz.de/10002812596
Persistent link: https://www.econbiz.de/10002812564
This paper considers whether eliminating the stock of government debt outstanding would reduce welfare. It models an economy with three assets - currency, government bonds, and storage, a transactions role for money, and a demand for liquidity and thus a role for banks. The Friedman rule is not...
Persistent link: https://www.econbiz.de/10012710271
Many claims have been made about the potential benefits, and the potential costs, of adopting a system of universal banking in the United States. We evaluate these claims using a model where there is a moral hazard problem between banks and quot;borrowers,quot; a moral hazard problem between...
Persistent link: https://www.econbiz.de/10012768031
We study a monetary, general equilibrium economy in which banks exist because they provide intertemporal insurance to risk-averse depositors. A quot;banking crisisquot; is defined as a case in which banks exhaust their reserve assets. Under different model specifications, the banking industry is...
Persistent link: https://www.econbiz.de/10012774311