It is given a deterministic dynamic equation of exchange taking into account existence of production-sale cycles with different periods. Obtained equation is strictly based on stock-flow consistent approach. The equation is a sort of law of money conservation. It is confirmed that Fisher's...

The mechanics of bank lending to resident borrowers in foreign currency in order to buy properties for domestic currency is given. It is shown that a bank may open a virtual position in a foreign currency, even not having the foreign currency in its vaults. Herewith, virtual cash flows and...

Sequentially examining the full chain of events starting from the default of firms through the fire-sale of goods towards write-offs of bad loans, a new matrix of financial transactions was developed. It was shown that if firms have no equities, the cost of default of those firms is equal zero....

Dynamics of turnovers of deposit accounts was studied by numerically solving Volterra summation equation. The obtained picture corresponds qualitatively to the actual oscillations of turnovers that are often observed in banking practice. It is shown that oscillatory regimes appear not only under...

A continuous-time deterministic model for analytical simulation of an impact of changes in credit turnover, term to maturity structure and rollover rate on balances of time banking deposits, i.e., preferences of depositors, is developed. The model allows taking into account an attraction of new...

A new model for predicting the future expected cash flows from a loan is developed. It is based on a detailed analysis of the events of fulfilling, delinquency and default of each individual payment on the loan. The proposed model has significantly less uncertainty compared with the Markov chain...

A simple approach to explicit estimating a credit limit for a firm that is based on Moody's KMV model is developed. It allows taking into account term to maturity of loan, quality of assets, a structure of a balance sheet and required level of default probability. The proposed approach describes...

It is developed the analytical approach based on the future value concept to directly extract the forward yield curve from the fixed coupon-bearing bond prices. It meets the next no-arbitrage condition: the rates of return on zero-coupon and coupon bonds with the same maturities should be equal....

The simple model of a small open emerging economy with full consumption of all manufactured products based on stock-flow consistent approach is developed. The transactions-flow matrix for emerging economy is defined. It takes into account banks' lending to produce goods by firms. The model...