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The Role of Bounded Rationality in Macro-Finance Affine Term-Structure Models

Yun, Tack; Kim, Jinsook; Ko, Eunmi - 2012

Our goal in this paper is two-fold. First, we develop a class of term structure models that allow for the role of bounded rationality by incorporating either information-processing constraint or fear for mis-specification into affine term structure models. We indentify a set of sufficient...

Persistent link: https://www.econbiz.de/10015235618

Inflation expectations derived from a portfolio model

Covarrubias, Enrique; Hernández-del-Valle, Gerardo - 2016

This paper proposes a new methodology for extracting inflation expectations from financial markets. For this purpose, a synthetic financial asset is built whose returns are matched with the inflation rate by construction. The methodology estimates the implicit return expected by the market on...

Persistent link: https://www.econbiz.de/10015250801

Firm leverage, household leverage and the business cycle

Solomon, Bernard Daniel - 2010

This paper develops a macroeconomic model of the interaction between consumer debt and firm debt over the business cycle. I incorporate interest rate spreads generated by firm and household loan default risk into a real business cycle model. I estimate the model on US aggregate data. This allows...

Persistent link: https://www.econbiz.de/10015224144

The United Kingdom: Economic Growth, a Draft Master Plan

De Koning, Kees - 2013

in the U.K economy for all households and to use accumulated savings more efficiently. Four proposals were formulated … imbalance between accumulated savings and spending power; to change the accounting rules for the banking sector in order to …

Persistent link: https://www.econbiz.de/10015235708

When savings are not counted as savings: The missed opportunity to use home equity to stimulate the U.S. economy

De Koning, Kees - 2022

money from their own bank savings, the conversion into cash does not turn itself into a new debt obligation. The result of … these latter economic actions “only” reduces their accumulated savings levels. In the U.S., the level of home equity reached … estimated nominal GDP for the U.S. of $23.2 trillion for 2021, this single savings category of $25.3 trillion has now exceeded …

Persistent link: https://www.econbiz.de/10015266794

The demographic transition and the asset supply channel

Amaral, Pedro - 2022

This paper examines the macroeconomic consequences of a demographic transition in an environment where a producer's capital structure is relevant, thereby introducing an asset supply channel. Producers are heterogeneous with respect to how productive they are in different states of the world and...

Persistent link: https://www.econbiz.de/10015268136

Economic System Failures: the U.S. case

De Koning, Kees - 2013

Tax Freedom Day memorises the day in a calendar year that individual households no longer transfer their income to their government, but start earning an income for the household. In the same manner one could also define a “Debt Freedom Day” as the day that individual households no longer...

Persistent link: https://www.econbiz.de/10015237438

A proposal to use two interest rates in the U.S.; the FED Funds Rate and the Economic Recovery Rate

De Koning, Kees - 2021

equity savings element. In case of an increase in base rates, the financial sector can be expected to follow up with an … savings element in U.S. home equity, currently estimated at $23.6 trillion. Treating home equity savings as a key to economic …

Persistent link: https://www.econbiz.de/10015255820

The risk of a recession period in the U.S. and the possible role of home equity

De Koning, Kees - 2022

The Bank of International Settlement in its latest report demonstrates how the inflation levels, especially of food and energy prices have affected the behaviour of households in the U.S and in other countries. This paper aims to set out a method to use home equity as a policy tool for the...

Persistent link: https://www.econbiz.de/10015268380

Monetary Policy and Risk Taking Behavior of Banks in Pakistan

Shabbir, Safia; Rana, Faisal; Iqbal, Javed - 2016

Using quarterly data on commercial banks operating in Pakistan over a period of 2002-2014, this study finds that banking sector in Pakistan takes more risk during ease and infection ratio increases with a rise in policy rate. In addition, with lower return on asset and small capital base, banks...

Persistent link: https://www.econbiz.de/10015214606