This paper investigates the role of trade credit in the transmissionof monetary policy. Most models of the transmission mechanism allowthe firm to access only financial markets or bank lending according tosome net worth criterion. In our model we introduce trade creditas an additional source of...

The theory of seigniorage is surveyed and reviewed. A theoretical model is developedwhich nests optimal tax theory and institutional approaches to fiscal and monetarypolicy...

This paper examines the impact of monetary policy on UK firms’ access to bank and market finance whenallowance is made for differences in firm-specific characteristics. A theoretical model determines the cut-off valuesfor project profitability that would allow firms to access bank or market...

We develop and analyse a simple general equilibrium model withcapital market imperfections We find that the impact of monetarypolicy on real economic activity depends on the initial distributionof wealth in the economy. Changes in the opportunity cost of fundsaffect not only the choice of...

Several authors have documented a reduced variability ofoutput and inflation in the United States since the beginningof the 1980s.1 In fact, a comparison of the 1980:1-2001:2 periodwith the two preceding decades shows that the standarddeviation of quarterly output growth has fallen 30...