Showing 1 - 10 of 129
Commercial banks increasingly use short-term wholesale funds to supplement traditional retail deposits. Existing literature mainly points to the "bright side" of wholesale funding: sophisticated financiers can monitor banks, disciplining bad ones but refinancing solvent ones. This paper models a...
Persistent link: https://www.econbiz.de/10011092929
We establish several stylized facts about the behavior of individual uncertainty and disagreement between individuals when forecasting inflation in the laboratory. Subjects correctly perceive the underlying inflation uncertainty in only 60% of cases, which can be interpreted as the...
Persistent link: https://www.econbiz.de/10011090681
Using laboratory experiments within a New Keynesian macro framework, we explore the formation of inflation expectations and its interaction with monetary policy design. The central question in this paper is how to design monetary policy in the environment characterized by heterogeneous...
Persistent link: https://www.econbiz.de/10011091246
Abstract: This paper compares the behavior of subjects' uncertainty in different monetary policy environments when forecasting inflation in the laboratory. We find that inflation targeting produces lower uncertainty and higher accuracy of interval forecasts than inflation forecast targeting. We...
Persistent link: https://www.econbiz.de/10011091914
Cognitive dissonance causes people to rationalize actions that differ from their own preferences.Conformity, on the other hand, causes people to change their behavior as a result of pressure from others.This paper investigates the consequences of preference dynamic that occur when individuals...
Persistent link: https://www.econbiz.de/10011092514
We investigate the determinants of decentralization and performance measurement choices in multidivisional firms.We extend the research on the economics of organizational design choices by examining the impact of two important determinants of those choices, namely, subunit interdependencies and...
Persistent link: https://www.econbiz.de/10011092876
This paper characterizes an optimal group loan contract with costly peer monitoring. Using a fairly standard moral hazard framework, we show that the optimal group lending contract could exhibit a joint-liability scheme. However, optimality of joint-liability requires the involvement of a group...
Persistent link: https://www.econbiz.de/10011099372
We study credit ratings on subprime and Alt-A mortgage-backed securities (MBS) deals issued between 2001 and 2007, the period leading up to the subprime crisis. The fraction of highly-rated securities in each deal is decreasing in mortgage credit risk (measured either ex-ante or ex-post),...
Persistent link: https://www.econbiz.de/10011090320
How do banks react to increased interbank competition?Recent banking theory offers conflicting predictions about the impact of competition on bank orientation í L H WKH choice of relationship based versus transactional banking í DQG EDQN LQGXVWU\ specialization.We empirically investigate the...
Persistent link: https://www.econbiz.de/10011090384
A recent string of theoretical papers highlights the importance of geographical distance in explaining pricing and availability of loans to small firms.Lenders located in the vicinity of small firms have significantly lower monitoring and transaction costs, and hence considerable market power if...
Persistent link: https://www.econbiz.de/10011090398