Showing 1 - 10 of 149
We consider a competitive bank loan market model where the marginal costs of managing and monitoring loans are assumed to increase as borrowers' net worth decreases. We show that the responsiveness of equilibrium bank loan rates to changes in interbank money market rates become weaker as...
Persistent link: https://www.econbiz.de/10010894544
This paper discusses the lean vs. clean policy debate in managing financial crises based on dynamic general equilibrium models with an occasionally binding collateral constraint. We show that a full state-contingent subsidy for debtors can restore the first-best allocations by forestalling...
Persistent link: https://www.econbiz.de/10011081660
This paper examines the relationship between monetary policy uncertainty and the term structure of interest rates. Extending the Ellingsen and Soderstrom (2001) model, we demonstrate that long-term interest rates are positively related to monetary policy uncertainty, with the magnitude...
Persistent link: https://www.econbiz.de/10010894622
This paper aims primarily to propose the framework for estimating the optimal levels of capital at banks with broad perspectives, elaborating factors such as liquidity and macroeconomic conditions. First, we attempt to reorganize the variety of policy proposals for enhancing financial sector...
Persistent link: https://www.econbiz.de/10010894635
A fast growing literature on small open economy models with pecuniary externalities has provided the theoretical grounds for the policy analysis of macro prudential regulations. Using the framework of Jeanne and Korinek (2010), we investigate whether a subsidy on debt during crises as a form of...
Persistent link: https://www.econbiz.de/10010904304
This paper reviews the experience of US monetary policy from 2000 to shed some light on issues regarding the effectiveness of monetary policy in a low inflation era. Our analysis is twofold. First, based on a simple inflation forecast targeting model introduced in Svensson (1997) and Kato and...
Persistent link: https://www.econbiz.de/10010907475
This paper presents an updated estimation of the total factor productivity (TFP) of the U.S. economy following the two preceding empirical studies, Basu et al. (2001) and Burnside et al. (1995). Based on these two estimation approaches, both of which carefully handle the potential estimation...
Persistent link: https://www.econbiz.de/10010907501
This note provides an example of a case where …nancial instability can be ampli…ed by stable fundamentals rather than risky fundamentals, using a variation of Diamond and Rajan (2009). Paper type – Research paper
Persistent link: https://www.econbiz.de/10011067491
This paper develops a dynamic general equilibrium model that explicitly includes a banking sector engaged in a maturity mismatch. We demonstrate that rational competitive banks take on excessive risks systemically, resulting in overleverage and ine¢ ciently high crisis probabilities. The model...
Persistent link: https://www.econbiz.de/10011067498
A fast-growing literature on small open economy models with pecuniary external- ities has provided the theoretical grounds for the policy analysis of macro-prudential regulations and bailouts. Benigno, Chen, Otrok, Rebucci, and Young (2012a) recently showed that the macro-prudential regulations...
Persistent link: https://www.econbiz.de/10011067501