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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

Fragility of safe asset markets

Eisenbach, Thomas M.; Phelan, Gregory - 2022

We model a safe asset market with investors valuing safety, investors valuing liquidity, and constrained dealers. While … safety investors and liquidity investors can interact symbiotically with offsetting trades in times of stress, we show that … liquidity investors' strategic interaction harbors the potential for selffulfilling fragility. Surprisingly, standard flight to …

Persistent link: https://www.econbiz.de/10013336346

Financial intermediaries, financial stability, and monetary policy

Adrian, Tobias (contributor); Shin, Hyun Song (contributor) - 2008

In a market-based financial system, banking and capital market developments are inseparable. We document evidence that balance sheets of market-based financial intermediaries provide a window on the transmission of monetary policy through capital market conditions. Short-term interest rates are...

Persistent link: https://www.econbiz.de/10003781771

Monetary cycles, financial cycles, and the business cycle

Adrian, Tobias; Estrella, Arturo; Shin, Hyun Song - 2010

One of the most robust stylized facts in macroeconomics is the forecasting power of the term spread for future real activity. The economic rationale for this forecasting power usually appeals to expectations of future interest rates, which affect the slope of the term structure. In this paper,...

Persistent link: https://www.econbiz.de/10003948217