We model the impact of bank mergers on loan competition, banks' reserve holdings and aggregate liquidity. Banks compete … in a differentiated loan market, hold reserves against liquidity shocks, and refinance in the interbank market. A merger … in liquidity risk and expected liquidity needs for each bank and for the banking system. Large mergers tend to increase …

asymmetrically to shocks, depending on the direction of the adjustment (positive vs negative) and the source of the shock (demand vs … profits to changes in demand u0096 play an important role in determining this asymmetry. Moreover, whereas cost shocks impact … more when prices have to be raised than when they have to be reduced, demand decreases are more likely to induce a price …

cost shocks compared to demand shocks: prices are more rigid downward than upward for cost shocks, while the reverse is … true for demand shocks. …

, institutional and other factors in shaping firms’ responses to a negative demand shock, an intermediate input cost shock and a wage … wage components mitigate firms’ responses to a slowdown in demand and an intermediate input cost increase. The behaviour of …