This paper utilizes VAR techniques to examine the relationship between a policy related variable and selected macro-variables in China. Johansen’s cointegration tests fail to find a moving equilibrium among the related variables. Based on a VAR model in first differences, we find that an...

lected macro-variables in China. Johansen’s cointegration tests fail to find a moving equilibrium among the related variables. Based on a VAR model in first differences, we find that an unexpected temporary one-off shock to the change in the seven-day money market interbank borrowing rate...

This paper proposed a new optimal design of Early Warning Systems (EWS) to detect early warning signals of an impending financial crisis. The problem of EWS was formulated from a policy maker's perspective. Hence the probability threshold was obtained by minimizing the policy maker's welfare...

This paper incorporates a search-and-matching model of the labor market into a “New Open Economy Macroeconomics” framework. This allows for an examination of the behavior of tradable and nontradable sector unemployment rates under alternative monetary rules. An examination of dynamics in...

Bank failures during banking crises, in theory, can result either from unwarranted depositor withdrawals during events characterized by contagion or panic, or as the result of fundamental bank insolvency. Various views of contagion are described and compared to historical evidence from banking...

There is a substantial literature arguing that financial development contributes to economic growth. In this paper, we contribute to this literature by examining the effect of state-level banking regulation on financial development and economic growth in the United States from 1900 to 1940....

Using a Bayesian likelihood approach, we estimate a dynamic stochastic general equilibrium model for the US economy using seven macro-economic time series. The model incorporates many types of real and nominal frictions and seven types of structural shocks. We show that this model is able to...

Sargent (1999) warns that if policy makers’ views on the unemployment-inflation trade-off are driven by empirical correlations, rather than theory, disinflations (escapes from high to low inflation) may periodically occur but are not bound to last. This Paper asks how different inflation...

In this paper, the role of the financial position of private agents in the transmission of monetary policy (the balance-sheet channel) is explored. To the extent that officila interest rates are able to affect the market value and the income flows of certain categories of financial instruments...

This paper analyses the cyclical behaviour of bank credit, loan losses and provisions for loan losses in Spain. These three variables are strongly cyclical in Spain -as in many other countries- and this poses some problems to bank supervisors and regulators. In a context of strong competitive...