The natural rate of interest, often interpreted as the equilibrium real interest rate, serves as a critical benchmark for evaluating the stance of monetary policy. This paper investigates the natural rate of interest in Uzbekistan using three econometric approaches: the HLW-type model1 , a...

Examining the economies of the European Union from 2000 to 2023, we have found no strong evidence that the inflation rate has a negative impact on economic growth. In contrast, in line with conventional economic theory, higher interest rates are associated with lower economic growth. The results...

We use narrative monetary policy shocks and local projections to estimate the impact of monetary policy on consumption and investment. We use granular data to investigate how the response varies across consumption categories, investment types, and sectors. Our findings indicate that both...

At the request of the Royal Monetary Authority of Bhutan (RMA), an IMF South Asia Regional Training and Technical Assistance Center (SARTTAC) visited Thimphu during August 20-29, 2024. The mission's objectives were to assist the authorities in setting up interest rate corridor (IRC) and...

This paper analyzes the transmission of ECB policy rate changes to bank interest rates in Kosovo during the 2022-23 tightening cycle. While both lending and deposit rates increased, the passthrough was more limited compared to the euro area and regional peers. Three key factors explain this...

We study the two-way relationship between fixed-rate mortgages (FRMs) and monetary policy in a panel of up to 35 countries over the last two decades. The dataset includes quarterly information on the composition of mortgage flows and stock by type of rate-fixation and monetary policy shocks...

I estimate how monetary policy affects the exchange rate in Norway using a local projection instrumental variables (LP-IV) framework with high-frequency monetary policy surprises as instruments. I find that a surprise increase in the Norwegian policy interest rate leads to an immediate...

Recent economic developments in Argentina give rise to several interesting observations about the workings and effects of economic policies. Of particular interest, of course, are the dramatic changes in inflation as a consequence of the economic policies of the newly elected President Javier...

We analyze the impact of negative reference rates on the interest behavior of more than 500 Austrian banks from 2009Q1 to 2021Q4. Using panel vector error correction analysis with the Engle-Granger procedure in two steps, we establish a cointegration vector that links bank-specific lending...

This study empirically investigates the impact of Inflation Targeting (IT) on nominal interest rates over the past 40 years, focusing on 10 advanced and emerging economies. By using a Binary Regime Model embedded within a Backward-Looking Taylor, our findings confirm that IT adoption has...

I develop a banking model with monopolistic competition to analyze the effect of reserve rate policy on bank insolvency risk, when banks are constrained by a zero lower bound on deposit rates. When binding, the lower bound compresses the solvency relevant deposit spread and causes it to be a...

This paper analyzes the monetary policy trade-off between defending purchasing power of consumers and keeping moderate debt cost for borrowers, in the framework of a heterogeneous agent New Keynesian open economy hit by a foreign energy price shock. Raising the interest rate indeed combats the...

This paper presents an integrated risk management methodology for measuring and managing the economics, risks, and financial resources/constraints related to deposits and loans in a commercial bank. Within a comprehensive and integrated framework, we develop valuation and risk models for all...

In this paper we assess the implications of monetary policy shocks on the house price to rent ratio in the case of the Irish property market. Crucially, in light of the particular circumstances of the market, we allow for the interaction between monetary policy and changing credit conditions in...

This paper explores the impact of the regulatory leverage ratio (LR) on banks' demand for reserves and thus the pricing of overnight liquidity in the euro area money markets. We use daily transaction-level money market data during the period between January 2017 February 2023 and examine the two...

This International Finance Corporation (IFC) Research Note analyzes the cost of borrowing for firms in emerging and developing economies, changes in their debt structure, and indicators of indebtedness and profitability. It finds reasons for optimism on their resilience, while noting that...

Household debt plays a crucial role in influencing the performance of the economy and its vulnerability to shocks. This study synthesises studies on this topic. We used the systematic literature review technique to analyse 97 studies from the EBSCO, Google Scholars, Sabinet African Journals,...

We study how short-term interest rate volatility affects the transmission of monetary policy. To identify exogenous changes in volatility, we exploit the pronounced heteroskedasticity visible in the time-series of euro area short-term rates over the past two and a half decades. Interacting the...

We analyze the impact of negative reference rates on the interest rate behavior of more than 500 Austrian banks from 2009Q1 to 2021Q4. Using panel vector error correction analysis with the Engle-Granger procedure in two steps, we establish a cointegration vector that links bank-specific lending...

This study has a twofold objective. The first one is an assessment of the efficiency of monetary and capital-based macroprudential policy, defined as imposing less interest costs to loan borrowers (nonfinancial corporations and households). The second objective of this paper is the assessment of...

We empirically document deviations of residential real estate prices from fundamental values at the micro level and investigate their relationship with local bank lending growth during a period of unconventional monetary policy. Our findings indicate a positive relationship between credit growth...

Certain fixed-income securities, such as callable bonds and mortgage-backed securities subject to prepayment, typically exhibit negative convexity at low yields and cannot be adequately immunized through duration and convexity-matching alone. To address this residual risk, we examine the...

Central banks often face tradeoffs in how their monetary policy decisions impact economic activity (including employment), inflation and the price level. This paper assesses how these tradeoffs have evolved over time and varied across countries, with a focus on understanding the post-pandemic...