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We augment a standard monetary DSGE model to include a banking sector and financial markets. We fit the model to Euro Area and US data. We find that agency problems in financial contracts, liquidity constraints facing banks and shocks that alter the perception of market risk and hit financial...
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and central bank conservatism on economic performance. Several striking conclusions emerge. In relatively centralized … of central bank conservatism. A radical-populist central banker who cares not at all about inflation (alternatively, who …
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composition of bank portfolios. According to the credit rationing view, equilibrium credit rationing in a world of asymmetric … institutional features of the national banking era. Most of the variation in bank loans is accounted for by loans secured by stock … the VAR model is greatly reduced, while the influence of money remains robust. The breakdown of the composition of bank …
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The paper sets out and analyzes a simple model of money, banking, and price level determination. The model is first used to illustrate recent developments in the theory and analysis of banking, particularly the distinction between the portfolio management services provided by banks and their...
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The paper uses bank- and instrument-level data on asset holdings and liabilities to identify and estimate a general … equilibrium model of trade in financial instruments. Bilateral ties are formed as each bank selects the size and the … lead to less amplification of partial equilibrium shocks, (ii) the influence of a bank's equity is independent of the size …
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