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In 1936-37, the Federal Reserve doubled the reserve requirements imposed on member banks. Ever since, the question of whether the doubling of reserve requirements increased reserve demand and produced a contraction of money and credit, and thereby helped to cause the recession of 1937-1938, has...
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This paper studies the extent to which alternative loan loss provisioning regimes affect the procyclicality of the financial system and financial stability. It uses a DSGE model with financial frictions (namely, balance sheet and collateral effects, as well as economies of scope in banking) and...
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"Deposits held at Federal Reserve Banks are an essential input to the business activity of most depository institutions in the United States. Managing these deposits is an important and complex inventory problem, for two reasons. First, Federal Reserve regulations require that depository...
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even exclude important information. This paper develops a new underlying inflation gauge (UIG) for China which … China in modelling inflation. The paper is the first application of this type of dynamic factor model for inflation to any … large emerging market economy. Our UIG for China is less noisy but still closely tracks the headline CPI. It does not suffer …
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