This paper discusses techniques for estimating structural vector autoregressions. Especially when monetary policy shocks are estimated, VAR residuals turn out to be leptokurtic. It is argued that this is no coincidence but follows directly from the properties of monetary policy decisions. The...

Argentina’s money and banking system was hit hard by the Great Depression. The banking sector was awash with bad assets that built up in the 1920s. Gold convertibility was suspended in December 1929, even before the crisis seriously damaged the core economies. Commonly, these events are seen...

This paper proposes a model of how agents adjust their asset holdings in response to losses in general equilibrium. By emphasising the relation between deflation and financial distress, we capture some original features of the early debt-deflation literature, such as distress selling,...

This is a short literature overview. (1) The literature demonstrates no coherent view on the nature of economic exchange and, in particular, provides no conventionally accepted, fully satisfactory explanation of the real effects of money. Recent developments in macroeconomics suggest a role for...

In this paper we analyse the potential for lending booms in three biggest new EU member states (Czech Republic, Hungary and Poland) during the process of Euro adoption. Experience of old members (Greece, Ireland and Portugal) as well as econometric evidence speak in favour of strong increases in...

In order to gain more insight into the relationship between housing prices and mortgage lending, we estimate models for both the Dutch housing and the mortgage market. The empirical analysis presented in this paper offers support for the hypothesis that in the Netherlands housing prices and...

The critical causes of the risk-averse behaviour of banks in funding Small and Medium Enterprises ( SMEs) in Nigeria, monetary policy and financial stability implications of SMEs “Credit Crunch” were evaluated. This was done along the lines of inadequate capital base of the institutions in...

Should one think of zero nominal interest rates as an undesirable liquidity trap or as the desirable Friedman rule? I use three different frameworks to discuss this issue. First, I restate Cole and Kocherlakota's (1998) analysis of Friedman's rule: short run increases in the money stock -...

The challenges of payment transactions in electronic commerce were initially underestimated, as is now clear in the light of technological progress and stricter legislation, meaning traditional business models are increasingly coming up against their limits. Only secure, user- friendly and...

In this paper, we introduce credit ceilings in the standard model of the money multiplier and analyze their role in central bank’s management of money supply in the presence of indirect monetary instruments. We show that under a regime of total credit ceilings, their optimal value equals the...