We develop a new framework to study the implementation of monetary policy through the banking system. Banks finance illiquid loans by issuing deposits. Deposit transfers across banks must be settled using central bank reserves. Transfers are random and therefore create liquidity risk, which in...

This paper reviews the short- and long-run dynamics of interest rate and inflation of the United States. Basing upon quarterly as well as monthly data over the period 1957 to 2010, we find evidence that interest rate behaviour of the Federal Reserve is consistent with the Taylor principle in...

Purpose – This paper aims to examine the controversial issue of the extent to which Federal Reserve monetary policy may have contributed to the recent housing crisis and subsequent adverse macroeconomic developments. Design/methodology/approach – The authors develop a small model that...

Purpose – The purpose of this paper is to investigate the performance of the trade-weighted US dollar from 1973 to 2011 as a result of monetary policy. Design/methodology/approach – Relevant time series variables – the money supply, the federal funds rate, general financial conditions,...

This study explores the use of impression management techniques promoting tax policy consistent with starve the beast (STB) policies. We employ thematic content analysis to examine how the 'independent' Federal Reserve Board (FRB) under Alan Greenspan used impression management tactics mimicking...

A recent literature has analysed the Central Bank's credibility nature and determinants. In general, a Central Bank with higher credibility can implement a more efficient monetary policy, which is expressed through lower social costs in terms of volatility of relevant variables, such as output...

From the early 1990s until 1998, Argentina liberalised its banking system as part of a strategy to enter a globalised economy. The subsequent monetary policies, combined with 'convertibilidad' and an elevated government debt, led to a loss of confidence in the financial system, ending in the...

This paper seeks to review a selection of ten salient critical claims about Economic and Monetary Union (EMU) that were heard in the 1990s in either the Political Science literature or the Economics literature or both. In this paper, the author focuses on five salient Political Science claims...