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Monetary policy: why money matters, and interest rates don’t

Thornton, Daniel L. - Federal Reserve Bank of St. Louis - 2012

rate. Money’s role in monetary policy has been tertiary, at best. Indeed, several influential economists have suggested … that money is irrelevant for monetary policy. They suggest that central banks can control inflation by (i) controlling a … rate in order to exert greater control over longer-term rates. I offer an alternative perspective: namely, that money is …

Persistent link: https://www.econbiz.de/10010558739

Central Bank Purchases of Private Assets

Williamson, Stephen D. - Federal Reserve Bank of St. Louis - 2014

A model is constructed in which consumers and banks have incentives to fake the quality of collateral. Conventional monetary easing can exacerbate these problems, in that the mispresentation of collateral becomes more profitable, thus increasing haircuts and interest rate differentials. Central...

Persistent link: https://www.econbiz.de/10010938568

The Expected Inflation Channel of Government Spending in the Postwar U.S.

Dupor, Bill; Li, Rong - Federal Reserve Bank of St. Louis - 2013

expected inflation, which in turn, reduces the real interest rate and leads to an increase in private consumption. This paper …

Persistent link: https://www.econbiz.de/10011027321

The value of inside and outside money: expanded version

Bullard, James; Smith, Bruce D. - Federal Reserve Bank of St. Louis - 2001

inside and outside money does and does not allow the economy to achieve a first-best allocation of resources. We also study …

Persistent link: https://www.econbiz.de/10005360600

Modeling monetary economies: an equivalence result

Camera, Gabriele; Chien, YiLi - Federal Reserve Bank of St. Louis - 2013

This paper offers a methodological contribution to monetary theory. First, it presents a model economy with cash-in-advance constraints, following the work of Lucas in the early 80’s; then, it specializes the model to preferences and shocks assumed in the Lagos and Wright (2005) framework....

Persistent link: https://www.econbiz.de/10011027345

Rehypothecation

Andolfatto, David; Martin, Fernando M.; Zhang, Shengxing - Federal Reserve Bank of St. Louis - 2014

Rehypothecation refers to the practice of re-using (selling or pledging as collateral) an asset that has already been pledged as collateral for a loan. We develop a dynamic general equilibrium monetary model where an “asset shortage” motivates the rehypothecation of assets. We find that in...

Persistent link: https://www.econbiz.de/10011160737

The macroeconomics of microfinance

Buera, Francisco J.; Kaboski, Joseph P.; Shin, Yongseok - Federal Reserve Bank of St. Louis - 2013

We provide a quantitative evaluation of the aggregate and distributional impact of microfinance or credit programs targeted toward small businesses. We find that the redistributive impact of microfinance is stronger in general equilibrium than in partial equilibrium, but the impact on aggregate...

Persistent link: https://www.econbiz.de/10010713998

An approximate dual-self model and paradoxes of choice under risk

Fudenberg, Drew; Levine, David K.; Maniadis, Zacharias - Federal Reserve Bank of St. Louis - 2012

We derive a simplified version of the model of Fudenberg and Levine [2006, 2011] and show how this approximate model is useful in explaining choice under risk. We show that in the simple case of three outcomes, the model can generate indifference curves that “fan out” in the Marshack-Machina...

Persistent link: https://www.econbiz.de/10011027334

The 2009 recovery act: stimulus at the extensive and intensive labor margins

Dupor, Bill; Mehkari, M. Saif - Federal Reserve Bank of St. Louis - 2014

This paper (i) estimates the local effects of government stimulus spending on labor market outcomes and (ii) shows how … reinforces the importance of the intensive labor margin. …

Persistent link: https://www.econbiz.de/10010890136

Fiscal Policy Spillovers: Points of Employment to Places of Residence

Dupor, Bill; McCrory, Peter B. - Federal Reserve Bank of St. Louis - 2014

U.S. counties into local labor markets, each of which we further partition into two subregions. We then compare … differential labor market outcomes and Recovery Act spending at the regional and subregional levels using instrumental variables …

Persistent link: https://www.econbiz.de/10010942506