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A model of the federal funds market: Yesterday, today, and tomorrow

Afonso, Gara; Armenter, Roc; Lester, Benjamin - 2018

The landscape of the federal funds market changed drastically in the wake of the Great Recession as large-scale asset purchase programs left depository institutions awash with reserves and new regulations made it more costly for these institutions to lend. As traditional levers for implementing...

Persistent link: https://www.econbiz.de/10011942785

Gazing at r-star : a hysteresis perspective

Beaudry, Paul; Kartashova, Katya; Meh, Césaire Assah - 2023 - Last updated: January 12, 2023

Many explanations for the decline in real interest rates over the last 30 years point to the role that population aging or rising income inequality plays in increasing the long-run aggregate demand for assets. Notwithstanding the importance of such factors, the starting point of this paper is to...

Persistent link: https://www.econbiz.de/10013482643

The role of bank capital in the propagation of shocks

Meh, Césaire Assah (contributor); Moran, Kevin (contributor) - 2008

Recent events in financial markets have underlined the importance of analyzing the link between the financial health of banks and real economic activity. This paper contributes to this analysis by constructing a dynamic general equilibrium model in which the balance sheet of banks affects the...

Persistent link: https://www.econbiz.de/10003773059

Real effects of price stability with endogenous nominal indexation

Meh, Césaire Assah; Quadrini, Vincenzo; Terajima, Yaz - 2009

We study a model with repeated moral hazard where financial contracts are not fully indexed to inflation because nominal prices are observed with delay as in Jovanovic & Ueda (1997). More constrained firms sign contracts that are less indexed to the nominal price and, as a result, their...

Persistent link: https://www.econbiz.de/10003852858

Bank leverage regulation and macroeconomic dynamics

Christensen, Ian; Meh, Césaire Assah; Moran, Kevin - 2011

This paper assesses the merits of countercyclical bank balance sheet regulation for the stabilization of financial and economic cycles and examines its interaction with monetary policy. The framework used is a dynamic stochastic general equilibrium model with banks and bank capital, in which...

Persistent link: https://www.econbiz.de/10009728167

Stressed, not frozen: The federal funds market in the financial crisis

Afonso, Gara; Kovner, Anna; Schoar, Antoinette - 2010

This paper examines the impact of the financial crisis of 2008, specifically the bankruptcy of Lehman Brothers, on the federal funds market. Rather than a complete collapse of lending in the presence of a market-wide shock, we see that banks became more restrictive in their choice of...

Persistent link: https://www.econbiz.de/10010287137

Financial intermediation, liquidity and inflation

Chiu, Jonathan (contributor); … - 2008

This paper develops a search-theoretic model to study the interaction between banking and monetary policy and how this interaction affects the allocation and welfare. Regarding how banking affects the welfare costs of inflation: First, we find that, with banking, inflation generates smaller...

Persistent link: https://www.econbiz.de/10003790575

The welfare cost of inflation revisited : the role of financial innovation and household heterogeneity

Cao, Shutao; Meh, Césaire Assah; Ríos-Rull, José-Víctor - 2018

We document that, across households, the money consumption ratio increases with age and decreases with consumption, and … that there has been a large increase in the money consumption ratio during the recent era of very low interest rates. We … construct an overlapping generations (OLG) model of money holdings for transaction purposes subject to age (older households use …

Persistent link: https://www.econbiz.de/10011895060

Aggregate and welfare effects of redistribution of wealth under inflation and price-level targeting

Meh, Césaire Assah (contributor); … - 2008

Since the work of Doepke and Schneider (2006a) and Meh and Terajima (2008), we know that inflation causes major redistribution of wealth between households and the government, between nationals and foreigners, and between households within the same country. Two types of monetary policy,...

Persistent link: https://www.econbiz.de/10003773003

Effects of funding portfolios on the credit supply of Canadian banks

Damar, H. Evren; Meh, Césaire Assah; Terajima, Yaz - 2015

This paper studies how banks simultaneously manage the two sides of their balance sheet and its implications for bank risk taking and real economic activity. First, we analyze how changes in funding affect the supply of bank loans. We then examine how the supply of credit by banks that rely more...

Persistent link: https://www.econbiz.de/10010488964