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The Deposits Channel of Monetary Policy
Drechsler, Itamar - 2016
by only comparing different branches of the same bank. Since deposits are the main source of liquid assets for households …. Since deposits are also a uniquely stable funding source for banks, the deposits channel impacts bank lending. When the Fed … estimates imply that the deposits channel can account for the entire transmission of monetary policy through bank balance sheets …
Persistent link: https://www.econbiz.de/10012456523
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Monetary Policy, Segmentation, and the Term Structure
Kekre, Rohan; Lenel, Moritz; Mainardi, Federico - National Bureau of Economic Research - 2024
We develop a segmented markets model which rationalizes the effects of monetary policy on the term structure of interest rates. When arbitrageurs' portfolio features positive duration, an unexpected rise in the short rate lowers their wealth and raises term premia. A calibration to the U.S....
Persistent link: https://www.econbiz.de/10014528364
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Bank Market Power and Monetary Policy Transmission : Evidence from a Structural Estimation
Wang, Yifei - 2020
We quantify the impact of bank market power on monetary policy transmission through banks to borrowers. We estimate a …-through of these costs to borrowers and depositors, while facing capital and reserve regulation. We find that bank market power … explains much of the transmission of monetary policy to borrowers, with an effect comparable to that of bank capital regulation …
Persistent link: https://www.econbiz.de/10012481840
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A Preferred-Habitat Model of Term Premia, Exchange Rates, and Monetary Policy Spillovers
Gourinchas, Pierre-Olivier; Ray, Walker; Vayanos, Dimitri - National Bureau of Economic Research - 2022
We develop a two-country model in which currency and bond markets are populated by different investor clienteles, and segmentation is partly overcome by global arbitrageurs with limited capital. Our model accounts for the empirically documented violations of Uncovered Interest Parity (UIP) and...
Persistent link: https://www.econbiz.de/10013172174
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Negative Nominal Interest Rates and the Bank Lending Channel
Eggertsson, Gauti B. - 2019
aggregate and bank level data, we document that deposit rates stopped responding to policy rates once they went negative and … that bank lending rates in some cases increased rather than decreased in response to policy rate cuts. Based on the … rates. Once the policy rate turns negative, the usual transmission mechanism of monetary policy through the bank sector …
Persistent link: https://www.econbiz.de/10012479372
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How Has the Monetary Transmission Mechanism Evolved Over Time?
Boivin, Jean - 2010
We discuss the evolution in macroeconomic thought on the monetary policy transmission mechanism and present related empirical evidence. The core channels of policy transmission - the neoclassical links between short-term policy interest rates, other asset prices such as long-term interest rates,...
Persistent link: https://www.econbiz.de/10012462771
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How Has the Euro Changed the Monetary Transmission?
Boivin, Jean - 2008
This paper characterizes the transmission mechanism of monetary shocks across countries of the euro area, documents how this mechanism has changed with the introduction of the euro, and explores some potential explanations. The factor-augmented VAR (FAVAR) framework used is sufficiently rich to...
Persistent link: https://www.econbiz.de/10012464457
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Liquidity Effects and the Monetary Transmission Mechanism
Christiano, Lawrence J. - 1992
Several recent papers provide strong empirical support for the view that an expansionary monetary policy disturbance generates a persistent decrease in interest rates and a persistent increase in output and employment. Existing quantitative general equilibrium models, which allow for capital...
Persistent link: https://www.econbiz.de/10012475008
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Monetary Policy According to HANK
Kaplan, Greg - 2016
We revisit the transmission mechanism of monetary policy for household consumption in a Heterogeneous Agent New Keynesian (HANK) model. The model yields empirically realistic distributions of household wealth and marginal propensities to consume because of two key features: multiple assets with...
Persistent link: https://www.econbiz.de/10012456775
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The Effects of Quantitative Easing on Interest Rates : Channels and Implications for Policy
Krishnamurthy, Arvind - 2011
We evaluate the effect of the Federal Reserve's purchase of long-term Treasuries and other long-term bonds ("QE1" in 2008-2009 and "QE2" in 2010-2011) on interest rates. Using an event-study methodology we reach two main conclusions. First, it is inappropriate to focus only on Treasury rates as...
Persistent link: https://www.econbiz.de/10012461102