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This paper assesses how the financial system influences the strength of the liquidity effect in a calibrated limited participation model of the monetary transmission mechanism. The model suggests that bankbased systems should be characterized by smaller liquidity effects since monetary...
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"This book examines the latest research on monetary policy, banking, and financial markets." …
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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 …
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