Showing 1 - 7 of 7
There is a broad consensus in the literature that costs of information processing and acquisition may generate costly disagreements in expectations among economic agents, and that central banks may play a central role in reducing such dispersion in expectations. This paper analyses empirically...
Persistent link: https://www.econbiz.de/10008458290
pure illiquidity risk. It is shown that, when bad states are highly unlikely, public provision of liquidity may improve the … an incentive of financial intermediaries to free ride on liquidity in good states, resulting in excessively low liquidity … more liquid investment. In that case, liquidity injection will make the free riding problem even worse. The results show …
Persistent link: https://www.econbiz.de/10005766205
We study the convergence of European bond markets and the anchoring of inflation expectations in euro area countries using high-frequency bond yield data for France, Germany, Italy and Spain. We find that Economic and Monetary Union (EMU) has led to substantial convergence in euro area sovereign...
Persistent link: https://www.econbiz.de/10005067658
prevent a run on financial intermediation by injecting liquidity when asset values fall significantly. The inflationary side … a central bank to inject liquidity in a crisis. …
Persistent link: https://www.econbiz.de/10005181425
The paper shows that US monetary policy has been an important determinant of global equity markets. Analysing 50 equity markets worldwide, we find that returns fall on average around 3.8% in response to a 100 basis point tightening of US monetary policy, ranging from a zero response in some to a...
Persistent link: https://www.econbiz.de/10005181586
How and why do politicians’ preferences about monetary policy differ from the interest rates set by independent central banks? Looking at the European Central Bank, the paper shows that politicians, on average, favor significantly lower interest rates. Three factors explain the different...
Persistent link: https://www.econbiz.de/10008784739
Just like private companies depend crucially on their ability to reach customers, policymakers must communicate with private agents to be successful--and much of this communication is channeled through the media. This is especially true for central banks because the effectiveness of monetary...
Persistent link: https://www.econbiz.de/10008854477