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We decompose aggregate consumption by modelling both savers and their links to collateral constrained borrowers through … proportion to the riskiness of assets, the demand for loans, the asset price and the quantity of housing collateral. We show that …
Persistent link: https://www.econbiz.de/10009787418
-in-advance constrained consumers on the basis of the value of collateral provided and the monitoring skills of banks. We show that when … shocks to monitoring and collateral dominate those to goods productivity and the velocity of money demand, money and the …
Persistent link: https://www.econbiz.de/10003784931
In response to the coronavirus (Covid-19) pandemic, there has been a complementary approach to monetary and fiscal policy in the United States with the Federal Reserve System purchasing extraordinary quantities of securities and the government running a deficit of some 17% of projected GDP. The...
Persistent link: https://www.econbiz.de/10013210564
-in-advance constrained consumers on the basis of the value of collateral provided and the monitoring skills of banks. We show that when … shocks to monitoring and collateral dominate those to goods productivity and the velocity of money demand, money and the …
Persistent link: https://www.econbiz.de/10010277852
We evaluate the Friedman-Schwartz hypothesis that a more accommodative monetary policy could have greatly reduced the severity of the Great Depression. To do this, we first estimate a dynamic, general equilibrium model using data from the 1920s and 1930s. Although the model includes eight...
Persistent link: https://www.econbiz.de/10009636549
Fiat money requires no backing to be accepted at a uniquely determined positive value. I show this using an equilibrium model with realistic frictions and rational households allowed to freely interact in a competitive environment. The model portrays a modern 'cashless' economy relying on...
Persistent link: https://www.econbiz.de/10013239778
Low and unresponsive inflation has been termed a “puzzle.”. The paper combines a monetary model and a growth model to explain low inflation and project its continued decline.The monetary model forecast in 2016 central banks would fail to reach 2% targets, which has been true. The model...
Persistent link: https://www.econbiz.de/10013242574
Analyzing inflation as a change in the value of a currency, rather than changes in prices of goods and services, provides perspective on three fundamental sources of inflation.A Money Value Formula produces a significant statistical fit with forward long-term inflation rates using long lags of...
Persistent link: https://www.econbiz.de/10012896591
The financial crisis has led to the development of an active debate on the use of macro-prudential instruments for regulating the banking system, in particular for liquidity and capital holdings. Within the context of a micro-founded macroeconomic model, we allow commercial banks to choose their...
Persistent link: https://www.econbiz.de/10013125800
The financial crisis has led to the development of an active debate on the use of macro-prudential instruments for regulating the banking system, in particular for liquidity and capital holdings. Within the context of a micro-founded macroeconomic model, we allow commercial banks to choose their...
Persistent link: https://www.econbiz.de/10008989902