Toolsema, Linda A. - Faculteit Economie en Bedrijfskunde, Rijksuniversiteit … - 2003
Applying a spatial competition model to banking, we analyze the effects of the choice of a monetary policy rule by the central bank on banks' market power as measured by the Lerner index. We show that a procyclical monetary policy may reinforce the countercyclical movement of the Lerner index....