We examine the effects of endogenously determined realignment expectations in a model of a target zone with sluggish price adjustment. We allow these expectations to be based on a policy rule which generates an increasing probability of realignment as output moves away from full employment. For...

The model of credit-constrained investors developed by Kiyotaki and Moore is used to analyse 'unconventional monetary policy' actions taken in the US and UK. We make two contributions. The first is expositional--to show that their model of a liquidity crisis can be represented as a two-equation...

Taking retail deposits and lending to SMEs and households were the traditional role of commercial banks: but banking in Britain has been transformed by increasing consolidation and by the lure of high returns available from investment banking. With appropriate changes to the Diamond and Dybvig...