This paper looks at macroeconomic factors behind the current crisis. The first part looks at how global macroeconomic trends-including sustained strong growth, low real interest rates, and high saving rates-provided an environment conducive to increased financial risk-taking. The second part...

What are the implications of digitalization for prices? This paper explores this question by looking at the various channels through which digitalization can affect prices. First, we assess the importance of the direct channel - the prices of digital goods and services in the consumer price...

The European Central Bank's interest rate hikes since July 2022 have been passed on to customers by banks on credit markets to a much greater extent than on deposit markets. As a result, banks' net interest margins have risen extraordinarily sharply. An analysis of the interest rate pass-through...

Monetary policy aims at affecting corporate borrowing by influencing the marginal costs of firms, but its potency can be conditioned by the degree of market competition. We first identify conditions under which changes in marginal costs may have different effects on credit constraints and output...

Low key rates hurt the profits of deposit-taking institutions in a differentiated Bertrand game if there is neither a tax on banknotes, nor a limit on its quantity, nor a reduction of its quality. By making the electronic dollar the unit of account and taxing paper currency, the central bank can...

This paper provides novel evidence on lenders’ mortgage pricing and how central bank policies affected it. Using the universe of mortgages originated in the U.K., we show that lenders seek to segment the market by offering two-part tariffs composed of interest rates and origination fees, and...

Monetary policy aims at affecting corporate borrowing by influencing the marginal costs of firms, but its potency can be conditioned by the degree of market competition. We first identify conditions under which changes in marginal costs may have different effects on credit constraints and output...

This paper analyses the consequences for monetary policy in the presence of currencies issued by firms. Such currencies generate seignorage revenues and information on consumers. In a benchmark model of imperfectly competing firms, information breaks the usual portfolio indeterminacy as in...

This paper provides novel evidence on lenders’ mortgage pricing and on how central bank operations affected it. Using the universe of mortgages originated in the UK, we show that lenders seek to segment the market by offering two-part tariffs composed of interest rates and origination fees,...