This research paper intends to redefine and extend the concept of 'optimal liquidity' discussed in Han and Lee (2012). For this purpose, we have distinguished between liquidity held by households and liquidity held by firms following Levhari and Patinkin (1968) and Yoo and Pyo (1986). Han and...

We show that a reduction in lender of last resort (LOLR) policy uncertainty posi-tively affects bank lending and propagates to investment and employment. We exploita unique policy that reduced uncertainty regarding the availability of future LOLRfunding for banks as a quasi-natural experiment....

This staff paper on euro area policy 2013 Article IV Consultation discusses economic development and policies. Severe market stresses have subsided, although private borrowing costs have remained too high in the periphery. In these economies, sovereign borrowing costs have declined from...

This 2013 Article IV Consultation highlights that high oil prices and increased production have enabled the government in Kuwait to continue to record high fiscal and external surpluses and build strong buffers. Overall real non-oil GDP growth is projected to increase modestly to 3 percent in...

This 2013 Article IV Consultation highlights that robust growth in Paraguay has been accompanied by declining inflation, particularly since 2011 when the central bank adopted inflation targeting. Despite the acceleration in growth in the 2000s, poverty and inequality in Paraguay remain among the...

We study the link between the global financial cycle and macroeconomic tail risks using quantile vector autoregressions. Contractionary shocks to financial conditions and monetary policy in the United States cause elevated downside risks to growth around the world. By tightening financial...

This study provides cross country robust evidence on interdependencies among inflation, output growth and respective uncertainties for the current era of low inflation policies. We attribute the extant empirical disagreement on these relations to the fact that long sampling periods and single...