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Reflections on the Current Fashion For Central Bank Independence
Bibow, Jörg - EconWPA - 2001
This paper challenges the time-inconsistency case for central bank independence. It argues that the time-inconsistency literature not only seriously confuses the substance of the rules versus discretion debate, but also posits an implausible view of monetary policy. Most worrisome, the...
Persistent link: https://www.econbiz.de/10005561151
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Monetary policy, credit and aggregate supply: the evidence from Italy
Fiorentini, R.; Tamborini, R. - EconWPA - 2000
This paper relates to the macroeconomic and monetary policy aspects of the so-called "credit channel" of monetary … financed by bank credit, and then we use it to identify the credit transmission mechanism in data drawn from the Italian … economy. We find evidence that the "credit variables" identified by the model, the overnight rate and a measure of credit risk …
Persistent link: https://www.econbiz.de/10005119371
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Social Security Reform with Uninsurable Income Risk and Endogenous Borrowing Constraints
Rojas, Juan; Urrutia, Carlos - EconWPA - 2004
, because of lack of commitment in the credit market, the borrowing constraint in the unique asset is endogenously determined by …
Persistent link: https://www.econbiz.de/10005076677
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Market imperfections, equilibrium and arbitrage
Jouini, Elyès - EconWPA - 2003
The theory of asset pricing, which takes its roots in the Arrow-Debreu model (Theory of value [1959, chap. 7]), the … only if it is, when appropriately renormalized, a martingale for some equivalent probability measure. The theory of pricing …
Persistent link: https://www.econbiz.de/10005076947
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Borrowing Constraints, Portfolio Choice, and Precautionary
Haliassos, Michael; Hassapis, Christis - EconWPA - 1998
This paper studies effects of two classes of borrowing constraints, collateral- and income-based, on wealth accumulation, portfolio behavior and on precautionary motives. We examine the sensitivity of solutions to tightness of constraints, education level, and preference parameters. The models...
Persistent link: https://www.econbiz.de/10005412592
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Debt-Constraints or Incomplete Markets? A Decomposition of the Wealth and Consumption Inequality in the U.S.
Cordoba, Juan-Carlos - EconWPA - 2004
The large wealth and consumption inequality in the U.S. is usually attributed to two market frictions: debt constraints and incomplete markets. Recent literature has argued that debt constraints are the critical friction while market incompleteness plays only a secondary role. We evaluate the...
Persistent link: https://www.econbiz.de/10005412632
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Optimal Consumption/Investment Policies with Undiversifiable Income Risk and Borrowing Constraints
Munk, Claus - EconWPA - 1997
We examine the optimal consumption and portfolio choice of an investor having an initial wealth endowment and an uncertain stream of income from non-traded assets. The income stream is not spanned by traded assets, and the investor is not allowed to borrow against future income, so the financial...
Persistent link: https://www.econbiz.de/10005561681
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A Preliminary Evaluation of Monetary Policy Rules for Russia
Souza, Lucio Vinhas de - EconWPA - 2004
The paper reviews the recent conduct of monetary policy and the central bank’s rule-based behavior in Russia. Using different policy rules, we test whether the central bank in Russia reacts to changes in inflation, output gap and the exchange rate in a consistent and predictable manner. Our...
Persistent link: https://www.econbiz.de/10005076844
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Gibson’s Paradox, Monetary Policy, and the Emergence of Cycles
Hannsgen, Greg - EconWPA - 2004
Many empirical studies have found that interest rate increases have a positive effect on the price level. This paper pursues an obvious, but neglected explanation: interest payments are a cost of production that is at least in part passed on to customers. A model shows that the cost- push effect...
Persistent link: https://www.econbiz.de/10005412732
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Interest Rate Rules and the Response to the Output Gap
Paez-Farrell, Juan - EconWPA - 2005
Modern monetary policy analysis is built around the concept of an interest rate rule that responds to both inflation and output. This paper evaluates the quantitative implications of having a policy rule target different definitions of the output gap in a New Keynesian model with endogenous...
Persistent link: https://www.econbiz.de/10005561337