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THE UNDERGROUND ECONOMY AND THE CURRENCY ENIGMA
Feige, Edgar L. - EconWPA - 2005
The size, growth and causes of the US “underground economy” are examined in light of new estimates of foreign holdings of US currency. World dollarization partially resolves the “currency enigma” which refers to the anomaly that roughly 80% of the US currency supply is “missing” and...
Persistent link: https://www.econbiz.de/10005076736
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The Use of Credit Ceilings in the Presence of Indirect Monetary
Yossifov, Plamen - EconWPA - 2003
In this paper, we introduce credit ceilings in the standard model of the money multiplier and analyze their role in … total credit ceilings, their optimal value equals the desired growth rate of the adjusted monetary base. Under a regime of … partial credit ceilings, their optimal value depends on the desired growth rate of the adjusted monetary base, the degree of …
Persistent link: https://www.econbiz.de/10005412743
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Should we be afraid of Friedman's rule?
Uhlig, Harald - EconWPA - 2000
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 -...
Persistent link: https://www.econbiz.de/10005561156
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Should Monetary Policy Respond to Asset Price Misalignments?
Kontonikas, Alexandros; Ioannidis, Christos - EconWPA - 2004
This paper analyses the relationship between monetary policy and asset prices using a structural rational expectations model that allows for the effect of asset prices on aggregate demand. We assume that asset prices follow a partial adjustment mechanism whereas they are positively affected by...
Persistent link: https://www.econbiz.de/10005076790
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The Fed and the Stock Market
D'Agostino, Antonello; Sala, Luca; Surico, Paolo - EconWPA - 2005
The Fed closely monitors the stock market and the stock market continuously forms expectations about the Fed decisions. What does this imply for the relation between the fed funds rate and the S&P500? We find that the answer depends on the conditions prevailing on the financial market. During...
Persistent link: https://www.econbiz.de/10005076811
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Expectations, Bond Yields and Monetary Policy
Chun, Albert Lee - EconWPA - 2005
Through explicitly incorporating analysts' forecasts as observable factors in a dynamic arbitrage- free model of the yield curve, this paper proposes a framework for studying the impact of shifts in market sentiment on interest rates of all maturities. An empirical examination reveals that...
Persistent link: https://www.econbiz.de/10005076986
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Collateral Constraints in a Monetary Economy
Cordoba, Juan Carlos; Ripoll, Marla - EconWPA - 2003
This paper studies the role of collateral constraints in transforming small monetary shocks into large persistent output fluctuations. We do this by introducing money in the heterogeneous-agent real economy of Kiyotaki and Moore (1997). Money enters in a cash-in-advance constraint and is...
Persistent link: https://www.econbiz.de/10005126270
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Implications of the design of monetary policy for financial stability
Herrero, Alicia García; López, Pedro del Río - EconWPA - 2003
This paper is a contribution to the literature on the factors behind financial stability, focusing on monetary policy design. In particular, it assesses empirically for a sample of 79 countries in the period 1970 to 2000 whether the choice of the central bank objectives and the monetary policy...
Persistent link: https://www.econbiz.de/10005126392
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Minsky's Acceleration Channel and the Role of Money
Hannsgen, Greg - EconWPA - 2003
effects of interest rate policy on the economy, answering the first question. A model based on Minsky's theory confirms the … plausibility of his theory. The model also shows that anti-inflationary policy destabilizes the economy and is therefore … are consistent with Minsky's theory. …
Persistent link: https://www.econbiz.de/10005561076
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The CNB’s Policy Decisions – Are They Priced in by the Markets?
Navrátil, David; Kotlán, Viktor - EconWPA - 2005
This paper asks to what extent the market prices in the future monetary policy decisions of the Czech National Bank (CNB), how this policy predictability has evolved over time, and whether the change in the central bank’s forecasting methodology in mid-2002 had any impact. Using a sample up to...
Persistent link: https://www.econbiz.de/10005561116