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Financial stability considerations for monetary policy : theoretical mechanisms
Ajello, Andrea; Boyarchenko, Nina; Gourio, François; … - 2022
This paper reviews the theoretical literature at the intersection of macroeconomics and finance to draw lessons on the connection between vulnerabilities in the financial system and the macroeconomy, and on how monetary policy affects that connection. This literature finds that financial...
Persistent link: https://www.econbiz.de/10013161877
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Dealer financial conditions and lender-of-last-resort facilities
Acharya, Viral V.; Fleming, Michael J.; Hrung, Warren B.; … - 2014
provided liquidity against a range of assets during 2008-09. Dealers with lower equity returns and greater leverage prior to … liquidity in explaining dealer behavior. The results suggest that both financial performance and balance sheet liquidity play a …
Persistent link: https://www.econbiz.de/10010404154
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When does a central ban's balance sheet require fiscal support?
Del Negro, Marco; Sims, Christopher A. - 2014
Using a simple general equilibrium model, we argue that it would be appropriate for a central bank with a large balance sheet composed of long-duration nominal assets to have access to, and be willing to ask for, support for its balance sheet by the fiscal authority. Otherwise its ability to...
Persistent link: https://www.econbiz.de/10010439643
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Fiscal foundations of inflation : imperfect knowledge
Eusepi, Stefano; Preston, Bruce - 2013
This paper proposes a theory of the fiscal foundations of inflation based on imperfect knowledge and learning. The theory is similar in spirit to, but distinct from, unpleasant monetarist arithmetic and the fiscal theory of the price level. Because the assumption of imperfect knowledge breaks...
Persistent link: https://www.econbiz.de/10010202656
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Interbank market and central bank policy
Ahn, Jung-hyun; Bignon, Vincent; Breton, Régis; … - 2016
We develop a model in which financial intermediaries hold liquidity to protect themselves from shocks. Depending on … parameter values, banks may choose to hold too much or too little liquidity on aggregate compared with the socially optimal … underinsurance against liquidity choice. The model therefore provides a unified framework for thinking, on the one hand, about policy …
Persistent link: https://www.econbiz.de/10011419845
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Macroeconomic effects of a government overdraft on its central bank account
Khemraj, Tarron - 2024
, allowing for the auctioning of Treasury bills to create the liquidity reflux necessary to refill the account. This paper …
Persistent link: https://www.econbiz.de/10014531238
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The role of consumption substitutability in the international transmission of shocks
Tille, Cédric - 1999
Persistent link: https://www.econbiz.de/10001398156
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Floor systems and the Friedman rule : the fiscal arithmetic of open market operations
Keister, Todd; Martin, Antoine; McAndrews, James Joseph - 2015
In a floor system of monetary policy implementation, the central bank remunerates bank reserves at or near the market rate of interest. Some observers have expressed concern that operating such a system will have adverse fiscal consequences for the public sector and may even require the...
Persistent link: https://www.econbiz.de/10011410519
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Understanding HANK : insights from a PRANK
Acharya, Sushant; Dogra, Keshav - 2018
per se. Incomplete markets reduce the effectiveness of forward guidance and multipliers in a liquidity trap only if risk …
Persistent link: https://www.econbiz.de/10011795425
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Learning the fiscal theory of the price level : some consequences of debt management policy
Eusepi, Stefano; Preston, Bruce - 2011
This paper examines how the scale and composition of public debt can affect economies that implement a combination of "passive" monetary policy and "active" fiscal policy. This policy configuration is argued to be of both historical and contemporary interest in the cases of the U.S. and Japanese...
Persistent link: https://www.econbiz.de/10009347987