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Liquidity problems lie at the heart of crises on financial markets as demonstrated in this paper by detailed descriptions of the stock market crash in 1987, the LTCM-crisis in 1998 and the financial market consequences of 11 September 2001. The events also demonstrate that modern central banks,...
Persistent link: https://www.econbiz.de/10005121208
This paper describes active investment strategy used in the central bank of Estonia and introduces model-based investment decisions as a component of that strategy. The first chapter of the paper describes the evolution of the investment process in Eesti Pank and outlines the framework of...
Persistent link: https://www.econbiz.de/10005121349
Economic derivatives allow traders to take direct positions on the outcomes of macroeconomic data releases. In contrast to survey-based measures, the prices of economic derivatives provide information on the entire probability distribution underlying these expectations, not just point estimates....
Persistent link: https://www.econbiz.de/10005121399
We study the role of bank capital and liquidity in the transmission of monetary policy in Switzerland. Using a large set of data, we test the assumptions that the effect of a change in the monetary policy stance on a bank's lending activity depends (i) on its capital (the bank capital channel)...
Persistent link: https://www.econbiz.de/10005427467
This paper develops an open economy model to assess the long-run effects of taxation where firms are finance constrained. Finance constraints arise because of imperfect information between borrowers and lenders. Only borowers (firms) can costlessly observe actual returns from production....
Persistent link: https://www.econbiz.de/10005430313
This paper develops a dynamic general equilibrium model to assess the cost of financial intermediation in a small open economy with a floating exchange rate and sticky prices. Costly financial intermediation raises the cost of capital and lowers the long-run level of steady state output, capital...
Persistent link: https://www.econbiz.de/10005430318
The effects of open market operations and long versus short bond financing on risk in financial markets in a stochastically growing economy are studied. An increase in short bonds, resulting from exchanging long bonds, increases the riskiness of long bonds and raises their real rate of return....
Persistent link: https://www.econbiz.de/10005432269
Il fenomeno dell'indebitamento, insolvenza e crisi economica nel capitalismo è interpretato dall'ortodossia economica secondo la logica speculativa. La nostra intenzione, invece, è interpretare il fenomeno dell'indebitamento, insolvenza e crisi economica nel capitalismo secondo la logica...
Persistent link: https://www.econbiz.de/10005434763
Long-horizon interest rates in the major international bond markets fell sharply during 2004 and 2005, at the same time as US policy rates were rising; a phenomenon famously described as a 'conundrum' by Alan Greenspan the Federal Reserve Chairman. But it was arguably the decline in...
Persistent link: https://www.econbiz.de/10005435687
The International Financial Services (IFS) industry is restructuring internally and by location. This paper outlines the economic forces and analytical methods that may be applied to examine the economic drivers of these processes as ever more countries and cities are vying for attracting IFS...
Persistent link: https://www.econbiz.de/10005435856