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Liquidity Effects, Monetary Policy, and the Business Cycle

Eichenbaum, Martin - 1992

This paper presents new empirical evidence to support the hypothesis that positive money supply shocks drive short-term interest rates down. We then present a quantitative, general equilibrium model which is consistent with the hypothesis. The two key features of our model are that (i) money...

Persistent link: https://www.econbiz.de/10012474841

Liquidity Effects and the Monetary Transmission Mechanism

Christiano, Lawrence J. - 1992

liquidity effects. This paper discusses the basic frictions and mechanisms underlying this new class of models and investigates … long-lasting, quantitatively significant liquidity effects, as well as persistent increases in aggregate economic activity …

Persistent link: https://www.econbiz.de/10012475008

Identification and the Liquidity Effect of a Monetary Policy Shock

Christiano, Lawrence J. - 1991

Conventional wisdom holds that unanticipated expansionary monetary policy shocks cause transient but persistent decreases in real and nominal interest rates. However a number of econometric studies argue that the evidence favors the opposite view, namely that these shocks actually raise, rather...

Persistent link: https://www.econbiz.de/10012475068

Liquidity Dependence and the Waxing and Waning of Central Bank Balance Sheets

Acharya, Viral V.; Chauhan, Rahul S.; Rajan, Raghuram Govind - National Bureau of Economic Research - 2023

in 2017, there was no commensurate shrinkage of these claims on liquidity. Consequently, the financial sector was left … more sensitive to potential liquidity shocks, with weaker-capitalized banks most exposed. This necessitated Fed liquidity … provision in September 2019 and again in March 2020. Liquidity-risk-exposed banks suffered the most drawdowns and the largest …

Persistent link: https://www.econbiz.de/10014247971

Understanding the Fiscal Theory of the Price Level

Christiano, Lawrence J. - 2000

Persistent link: https://www.econbiz.de/10012471099

Contingent Credit Under Stress

Acharya, Viral V.; Jager, Maximilian; Steffen, Sascha - National Bureau of Economic Research - 2023

' provision of liquidity insurance in the form of credit lines, their significance in managing corporate liquidity, and the …

Persistent link: https://www.econbiz.de/10014437040

Assessing Structural VARs

Christiano, Lawrence J. - 2006

This paper analyzes the quality of VAR-based procedures for estimating the response of the economy to a shock. We focus on two key issues. First, do VAR-based confidence intervals accurately reflect the actual degree of sampling uncertainty associated with impulse response functions? Second,...

Persistent link: https://www.econbiz.de/10012466312

The Internal Governance of Firms

Acharya, Viral V. - 2009

We develop a model of internal governance where the self-serving actions of top management are limited by the potential reaction of subordinates. Internal governance can mitigate agency problems and ensure that firms have substantial value, even with little or no external governance by...

Persistent link: https://www.econbiz.de/10012463081

Zombie Lending : Theoretical, International and Historical Perspectives

Acharya, Viral V.; Crosignani, Matteo; Eisert, Tim; … - National Bureau of Economic Research - 2022

This paper surveys the theory on zombie lending incentives and the consequences of zombie lending for the real economy. It also offers a historical perspective by reviewing the growing empirical evidence on zombie lending along three dimensions: (i) the role of under-capitalized banks, (ii)...

Persistent link: https://www.econbiz.de/10013190998

Liquidity Risk of Corporate Bond Returns : A Conditional Approach

Acharya, Viral V. - 2010

We study the exposure of the US corporate bond returns to liquidity shocks of stocks and Treasury bonds over the period … 1973 - 2007 in a regime - switching model. In one regime, liquidity shocks have mostly insignificant effects on bond prices … default), suggest the existence of time-varying liquidity risk of corporate bond returns conditional on episodes of flight to …

Persistent link: https://www.econbiz.de/10012462262