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The topology of the federal funds market

Bech, Morten L.; Atalay, Enghin - 2008

The recent turmoil in global financial markets underscores the importance of the federal funds market as a means of distributing liquidity throughout the financial system and a tool for implementing monetary policy. In this paper, we explore the network topology of the federal funds market. We...

Persistent link: https://www.econbiz.de/10010283501

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

The Federal Home Loan Bank System: The lender of next-to-last resort?

Ashcraft, Adam B.; Bech, Morten L.; Frame, W. Scott - 2008

The Federal Home Loan Bank (FHLB) System is a large, complex, and understudied government-sponsored liquidity facility that currently has more than $1 trillion in secured loans outstanding, mostly to commercial banks and thrifts. In this paper, we document the significant role played by the FHLB...

Persistent link: https://www.econbiz.de/10010283557

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

Mapping change in the federal funds market

Bech, Morten L.; Bergstrom, Carl T.; Garratt, Rodney J.; … - 2011

We use an information-theoretic approach to describe changes in lending relationships between federal funds market participants around the time of the Lehman Brothers failure. Unlike previous work that conducts maximum-likelihood estimation on undirected networks, our analysis distinguishes...

Persistent link: https://www.econbiz.de/10010287188

Technology diffusion within central banking: The case of real-time gross settlement

Bech, Morten L.; Hobijn, Bart - 2006

We examine the diffusion of real-time gross settlement (RTGS) technology across all 174 central banks. RTGS reduces settlement risk and facilitates financial innovation in the settlement of foreign exchange trades. In 1985, only three central banks had implemented RTGS systems, and by year-end...

Persistent link: https://www.econbiz.de/10010283352