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....

In this paper, we study the role of habit formation in accounting for the joint behavior of the real interest rate and consumption growth following a monetary policy shock. A VAR estimation on US data shows that following a contractionary monetary policy shock, the real interest rate exhibits a...

We construct a dynamic heterogeneous-agent model with random uninsurable endowments. Two allocation mechanisms are considered, one with long-term complete credit arrangements under private information, and one with incomplete competitive markets. A role for money arises due to random limited...

In recent years, many developing countries have intervened in foreign exchange markets to offset to some extent the effect on their economies of large capital flows. Often, changes in reserve requirements were used to mitigate the impact of that intervention on domestic money supplies. Because...

In this paper the case made by Klein (1975) and Hayek (1976) for competitive bank monies is reconsidered. To do so we build a model of the demand for bank money that derives from money’s ability to separate commodity purchases from sales across time and so avoid the trading costs implied by...

In this paper the proposal for indirect convertibility (henceforth, IC)] put forward by Greenfield and Yeager (1983, 1989) is reexamined and reinterpreted to show that IC can provide a practical monetary policy rule for central banks currently engaged in inflation targeting. One reason for such...

This paper gives an overview and assessment of the evolution of the Ukrainian banking sector since the outset of transition, focusing on the most recent developments. While the 1990s saw turbulent changes against the backdrop of continuous economic contraction, the Ukrainian banking sector has...

This paper brings together the literature on determination of home bias in equity holdings and the portfolio balance model of exchange rates to consider whether the dollar might be affected by a change in transactions costs that alters international portfolio allocations. Our empirical findings...

Der europäische Stabilitäts- und Wachstumspakt zählt zu den zentralen Pfeilern der Europäischen Währungsunion. Die Erfahrungen der letzten Jahre zeigen jedoch, dass seine disziplinierende Wirkung zur Begrenzung übermäßiger Defizite in Zweifel zu ziehen ist. Auf der Basis des von Ronald...