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...

This paper examines the heterogeneous effects of the ECB's monetary policies on the resilience of the German banking system between 1999 to 2022. We distinguish between the main bank types in Germany: Large Banks, Regional Banks, Sparkassen, Landesbanken and Credit Unions. We proxy bank-type...

This study empirically analyzes the MPTM through bank’ balance sheet in Pakistan for the period of 2008-2018. The data set consists of 22 conventional banks and 18 Islamic banks (5 full-fledged and 13 Islamic windows of conventional banks) of Pakistan. The study employs the robust two-step...

This article aims to offer a contribution to the debate on the pros and cons of higher financial openness with respect to growth. It analyses two closed economies instantaneously open to trade and financial movements. Openness to trade is without frictions and entails a built-in positive shock...

We develop a new framework to examine the effects of retail central bank digital currencies (CBDCs) on financial inclusion and stability, particularly how the results depend on an economy's existing degree of financial development. We demonstrate that when offering CBDCs in underdeveloped...

In April 2022, the Bank of Canada announced that it would continue to use a floor system to implement monetary policy by providing a sufficiently large quantity of settlement balances to enable the overnight repo rate to trade at close to the deposit rate. In contrast, the Bank's guiding...

Deposit and Lending Interest Rate Liberalization Reforms Challenges, Pathways, and Policy Options -- Deposit and Lending Rates: Significance and Impacts of their Liberalization -- China’s Return on Capital and Real Interest Rates in Relation to Investment -- Household Savings Impact of...

In the last few decades, real GDP growth and investment in advanced countries have declined in tandem. This slowdown was not the result of weak demand (there has been no shift along the Okun curve), but of a decline in potential output growth (which has shifted the Okun curve to the left). We...

This paper seeks to inform about a feature of monetary policy that is largely overlooked, yet occupies a central role in modern monetary and financial systems, namely central bank collateral frameworks. Their importance can be understood by the observation that the money at the core of these...

The Federal Reserve is exposed to a greater degree of political influence under its new operating regime. We survey the relevant literature and describe the Fed's new operating regime. Then we explain how the regime change reduced de facto central bank independence. In brief, the regime change...