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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

Endogenously segmented asset market in an inventory theoretic model of money demand

Chiu, Jonathan (contributor) - 2007

This paper studies the effects of monetary policy in an inventory theoretic model of money demand. In this model, agents keep inventories of money, despite the fact that money is dominated in rate of return by interest bearing assets, because they must pay a fixed cost to transfer funds between...

Persistent link: https://www.econbiz.de/10003560555

Central bank haircut policy

Chapman, James; Chiu, Jonathan; Molico, Miguel - 2010

We present a model of central bank collateralized lending to study the optimal choice of the haircut policy. We show … agents on the other. We argue that the optimal haircut is higher when the central bank is unable to lend exclusively to … agents who actually need liquidity. Finally, for an unexpected drop in the haircut, the central bank can be more aggressive …

Persistent link: https://www.econbiz.de/10008659919

Relationships in the interbank market

Chiu, Jonathan; Monnet, Cyril - 2016

The market for central bank reserves is mainly over-the-counter and exhibits a core-periphery network structure. This … trade in the interbank market. Relationships matter for banks' bidding strategies at the central bank auction and introduce … anomalies in the level of interest rates - namely, that banks sometimes trade above (below) the central bank's lending (deposit …

Persistent link: https://www.econbiz.de/10011517056

On the fragility of DeFi lending

Chiu, Jonathan; Ozdenoren, Emre; Yuan, Kathy; Zhang, … - 2023 - Last updated: February 22, 2023

We develop a dynamic model of decentralized finance (DeFi) lending that incorporates two/these key features: 1) borrowing and lending are decentralized, anonymous, overcollateralized and backed by the market value of crypto assets where contract terms are pre-specified and rigid; and 2)...

Persistent link: https://www.econbiz.de/10014232356