The IMF began to play a prominent role in low-income countries in the late 1970s and 1980s when many countries faced overvalued exchange rates, growing budget deficits, high inflation, and low reserves. But times have changed, and many low-income countries no longer face these problems and do...

This paper investigates a new mechanism through which "liquidity effects" (i.e. a negative response of the nominal interest rate to monetary injections) can be introduced into dynamic stochastic general equilibrium (DSGE) models. As it turns out, this liquidity effect has been found difficult to...

The paper considers three methods for eliminating the zero lower bound on nominal interest rates and thus for restoring symmetry to domain over which the central bank can vary its policy rate. They are: (1) abolishing currency (which would also be a useful crime-fighting measure); (2) paying...

Hong Kong has witnessed an equity initial public offering (IPO) boom since 2005. As the interbank payments involved in an IPO can be hundreds of times larger than the Aggregate Balance, increased funding needs and heightened demand for interbank liquidity may drive interbank interest rates up....

This paper investigates the degree and nature of economic and monetary policy relations among the United States, the Euro area, and Great Britain. Using daily interest rates, we estimate the impact of monetary policy announcements of a Central Bank on its domestic market and in what measure...

The Taylor hypothesis is the conjecture that the 2007-2009 financial crisis and the 2008-present downturn have been caused by loose monetary policy during 2002-2006. According to the Taylor hypothesis the Fed deviated from well-know rules of monetary policy-making over this period, and this...

We derive the new Keynesian IS curve from the Fisher relation and the expectations theory of the term structure, without reference to household preferences. We show that, under certain conditions, parameters of the empirical new Keynesian IS curves need not be estimated but can be calibrated...

This study empirically examines the impact of the federal government budget on the nominal interest rate yield on US Treasury notes over the 1979-2001 period. In a system that includes the monetary base, the civilian labor force unemployment rate, the ex ante real 52 week Treasury bill rate, and...

The study investigates the effect of interest rates on customer savings behavior in the Nigerian banking sector, after identifying a host of factors that are likely to influence customer confidence in commercial banks such as average income, commercial lending, legal rights strength, central...

In the first essay, Calomiris argues that the most desirable means by which to achieve banking system stability is to permit unlimited branch banking combined with the type of privately administered formal deposit insurance programs of antebellum Indiana, Ohio, and Iowa. In the second essay,...