Download or read book Essays on Financial Stability and Monetary Policy written by Pascal Paul and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Financial Stability Monetary Policy and Welfare written by Ester Faia and published by . This book was released on 2002 with total page 366 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on the Interaction between Monetary Policy and Financial Markets written by Alain Durré and published by Presses univ. de Louvain. This book was released on 2003 with total page 188 pages. Available in PDF, EPUB and Kindle. Book excerpt: Despite the consequences of financial bubbles on economic activity, it is still an open question to what extent the monetary policy should react to sharp fluctuations of equity prices. This dissertation attempts to contribute to the debate with some theoretical and empirical analyses of the relationship between monetary policy and financial markets. Chapter 1 incorporates the effect of real equity prices on aggregate demand in a forward-looking expectations neo-Keynesian model. This effect arises either from a wealth effect or from a change in consumers' confidence. The objective function of monetary authorities depends on the output gap and the deviation of expected inflation from the target. A numerical simulation, based on US data, illustrates the quantitative importance of the financial market channel for various exogenous shocks. In Chapter 2, the variation of equity prices enters explicitly in the loss function of the monetary authorities while, at the same time, it affects aggregate demand. This modifies the optimal monetary policy by increasing the volatility of the nominal interest rate. Chapter 3 examines how the launch of the European single currency has affected expectations on future monetary policy by comparing the econometric results of a co-integrated VAR model on pre- and post- January 1999 data. Chapter 4 deals with diverse methodological issues related to the estimation of the Taylor rule, which represents Central Bank decisions by a single and stable function. Several interesting results emerge from the modelling of the Fed funds rate over the period 1987-2002. In particular, assuming a discontinuous and asymmetric response of the Federal Reserve to fluctuations of equity prices, corrects the apparent instability of the rule.

Download or read book Essays on Banking Financial Stability and Monetary Policy written by Kyounghoon Park and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Financial Stability written by John F. Chant and published by . This book was released on 2003 with total page 132 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Elusive Stability written by Barry Eichengreen and published by Cambridge University Press. This book was released on 1990 with total page 356 pages. Available in PDF, EPUB and Kindle. Book excerpt: A new interpretation of the operation and macroeconomic repercussions of the international monetary system during the interwar years.

Download or read book Banking Monetary Policy and the Political Economy of Financial Regulation written by Gerald A. Epstein and published by Edward Elgar Publishing. This book was released on 2014-07-31 with total page 391 pages. Available in PDF, EPUB and Kindle. Book excerpt: The many forces that led to the economic crisis of 2008 were in fact identified, analyzed and warned against for many years before the crisis by economist Jane D�Arista, among others. Now, writing in the tradition of D�Arista's extensive work, the

Download or read book Three Essays on Financial Markets and Monetary Policy written by Abeba Siraj Mussa and published by . This book was released on 2011 with total page 144 pages. Available in PDF, EPUB and Kindle. Book excerpt: The global financial crisis triggered by fallout form the sub-prime mortgage market in the U.S. has led economists to focus attention on the role of monetary policy in the crisis. The question of how monetary policy affects the financial sector is the key to the current debate over the role financial stability should play in the monetary policy decisions. As a contribution to this debate, my dissertation examines the link between monetary policy and three main financial sectors-the banking sector, the stock market, anf the housing market. The first essay examines whether the Federal Open Market Committee (FOMC) responded to changes in equity prices during the period 1966-2009. I distinguish the indirect response, where the FOMC reacts to equity prices only when equity prices affect its target variables, from the direct response, where the FOMC reacts to equity prices directly regardless of their effects on the target variables. In addition, the paper models the Federal Reserve's reaction function as state dependent, hypothesizing that the FOMC may respond to changes in asset prices asymmetrically during different states of the economy. The results show that the FOMC did respond directly to equity price changes when asset prices were falling. During non-bust periods, the FOMC did not respond directly to equity prices. It used information on equity prices to forecast target variables. The second essay investigates the effect of expansionary and contractionary monetary policy on the risk taking behavior of low-capital and high-capital banks. Using quarterly data on federally insured banks spanning the period from 1991 to 2010, the paper shows that expansionary policy caused high capital banks to take more risk. Capital constrained banks were not significantly affected by expansionary monetary policy. Contractionary monetary policy, however, is not effective in affecting the risk-taking behavior of both capital-constrained and unconstrained banks. The paper, therefore, confirms the hypothesis that expansionary policy is more effective in encouraging capital unconstrained banks to invest more in risky assets. The third essay examines the role of monetary policy on housing bubbles in the last three decades. A spatial dynamic model is used to explicity account for spatial cross-section dependence in the data. Using quarterly panel data on 48 contiguous U.S. states and the District of Columbia, the paper discovers that the housing bubbles across the U.S. are mainly driven by the local or state specific factors during the period 1976-2000. However, the prolonged low interest rate since the 2001 recession contributed to the run-up in house prices acrsss states.

Download or read book Essays on Monetary Policy written by Adnan Kummer and published by . This book was released on 2015 with total page 240 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three essays on monetary policy. The first essay estimates the impact of the European Central Bank's (ECB) monetary policy rate changes on individual member country's economic output in Eurozone. The results show that real output responds differently in different Eurozone members and highlight the "convergence gap" that continues to exist among member countries. Based on their output response, the sample countries are divided into two groups which exhibit the breakdown of monetary policy transmission mechanism in the currency union. The second essay uses the Taylor rule model to calculate the optimal interest rates for individual eurozone members based on their local economic variables of output gap and inflation rate. The results indicate that at the aggregate level the Taylor rule tracks the ECB policy rate very closely but when the rule is applied to individual Eurozone countries, the models predicts very different rates for member economies. Additionally, the Eurozone sample countries are organized into two sets of groups namely Core versus Periphery and North versus South to analyze whether the national monetary policy requirements of member countries can be grouped based upon their economic characteristics and on their geographical location. In both cases, the rule predicts different rates for the groups compared to the ECB policy rates. The third essay investigates the institutional arrangement of monetary policy and its interaction with macroprudential policy in economic and financial stability. The interactions of macroprudential policy with both monetary and fiscal policy are explored to determine the effectiveness of this new policy framework. The analysis shows that while political and budget support are essential for the policy's design and implementation, there should be no connection politically with the execution of macroprudential policy because of short-sightedness of the political process which could potentially delay or jeopardize the roll-out of the policy's tools when necessary. Overall, the dissertation contributes to the growing literature on monetary policy in currency unions and offers policy insights to overcome the obstacles of monetary policy transmission mechanism and to develop a more robust policy framework for economic and financial stability.

Download or read book Essays on Uncertainty Monetary Policy and Financial Stability written by Alain Schlaepfer and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays in Macroeconomic Policy written by Miranda S. Goeltom and published by Gramedia Pustaka Utama. This book was released on 2007 with total page 624 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Monetary Policy Global Financial Flows and Financial Stability written by Eric Mathias Fischer and published by . This book was released on 2016 with total page 187 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation analyzes issues in monetary policy, global financial flows and financial stability. Chapters 2 and 3 are empirical and explore the effects of monetary policy on international debt flows to emerging markets and both debt and equity flows to Latin America. Chapter 4 is a theoretical agent based model of financial stability that examines systemic risk in financial networks with banks and non-financial transactors.

Download or read book Monetary Stability through International Cooperation written by Age F.P. Bakker and published by Springer Science & Business Media. This book was released on 2013-06-29 with total page 390 pages. Available in PDF, EPUB and Kindle. Book excerpt: Monetary Stability through International Cooperation contains essays written by high ranking policy makers in the field of central banking and international finance, written in honour of André Szász, who has been Executive Director of De Nederlandsche Bank since 1973, responsible for international monetary relations. Colleagues from several other central banks, from finance ministries and from international institutions pay tribute to him by analysing the conditions fostering European as well as global monetary stability. The book provides an inside view of the thinking of monetary officials at the turn of 1993/1994, when the currency turmoil in the ERM of mid-1993 had subsided and views on its implications for exchange rate management and, more generally, for European integration were taking shape. Topics include exchange rate stabilisation, policy coordination and central bank independence. A second section, on the international monetary system, includes essays on the policy implications of present day dynamic financial markets as well as the role of the IMF. This book, written by `insiders for an insider', provides valuable insights to those who are interested in contemporary international monetary relations.

Download or read book Essays in Monetary and Financial Economics written by Johannes Fischer and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis investigates how central bank policies affect the economy. The core of central banking is of course monetary policy. However, more recently, central banks have also introduced a wider range of regulatory policies to ensure financial stability. I investigate how these policies affect the economy with a particular focus on inflation expectations, capital (re-)allocation, and bank stress tests. In the first chapter I investigate the conduct of monetary policy in a model with an endogenous degree of expectations anchoring. The anchoring of inflation expectations is a central tenet of monetary policy making. Most central banks in advanced economies try to anchor private long-term inflation expectations to their inflation target. I use an estimated New Keynesian model with endogenous forecast switching to replicate the time-varying excess sensitivity of long-term inflation expectations to inflation surprises as well as the resulting movements of long-term inflation expectations. In this model, de-anchoring leads to increased inflation volatility and can cause deflationary spirals when the zero lower bound (ZLB) is binding. This can be prevented by an asymmetric monetary policy rule which responds more aggressively to below-target inflation. Price Level Targeting, on the other hand can increase the risk of deflationary spirals near the ZLB. In the second chapter, written jointly with Carl-Wolfram Horn, we analyse the effect of monetary policy on mergers and acquisitions (M&A) activity in the U.S. Even though there exists a popular narrative that monetary policy is a key driver of M&A activity, little academic research has been conducted to establish how monetary policy in fact affects M&A activity. We confirm the predictions of a stylised model with frictional financial markets by showing that contractionary monetary policy significantly decreases M&A activity, especially for financially constrained firms. We furthermore investigate the effect of monetary policy on deal quality, measured as the abnormal stock returns for the acquiring firm. We find that contractionary monetary policy reduces beneficial capital reallocation by reducing M&A activity, but the marginal transaction is of higher quality as fewer constrained firms engage in M&A. In the third chapter, written jointly with Natalie Kessler, we study stress tests, a prominent tool employed by central banks around the world such as the Federal Reserve in their role as financial regulator to enhance financial stability. This constitutes a de facto constraint on balance sheets: equity must be sufficient to maintain current lending also tomorrow, even after absorbing severe loan losses. We study the effects of such forward looking constraints in a representative bank model. More severe stress tests scenarios lead to lower dividends, higher equity levels, and universally lower, albeit less volatile, lending. Subsequently, we calibrate our model to U.S. banks to compute the optimal, state-dependent severity of stress tests. Finally, we compare stress tests with several policy alternatives, such as the Covid-19 dividend ban, the counter-cyclical capital buffer (CCyB), and the dividend prudential target (DPT): while the first two perform well as complementary policies, a DPT is not welfare-improving for a supervisor seeking stable lending levels.

Download or read book Money Markets and Jobs written by Eric Tong and published by . This book was released on 2016 with total page 169 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis examines three aspects of the global financial crisis: the pre-crisis buildup of bank fragility and the role played by US monetary policy; the market mayhem triggered by asset managers in the wake of US monetary policy normalisation following the crisis; and the labour market consequences of a withdrawal of bank credit following re-evaluation of financial collateral by investors. Using theoretical and empirical methods I show that, while each of these episodes appear as outcomes of an interchange of optimism and panic, they can be interpreted as rational responses by market participants to deep frictions within the economy. Specifically, I find that (i) there is evidence of a global financial cycle in which loose US monetary policy heightens the default risk of banks in other countries; (ii) market panics and the equilibrium allocation of arbitrage capital hinge on the stance of monetary policy. Since arbitrage pro ts depend on expectations of future crises, which are contingent on the actions of central banks, asset managers keen to keep up with their peers may race to sell assets at the same time; (iii) worsening collateral quality does not always trigger screening by banks but, when it does, employers are deprived of funds to hire, triggering job losses. The analysis contributes to the wider debate on the use of monetary and macroprudential policy to foster financial stability.

Download or read book Current Federal Reserve Policy Under the Lens of Economic History written by Owen F. Humpage and published by Cambridge University Press. This book was released on 2015-03-05 with total page 765 pages. Available in PDF, EPUB and Kindle. Book excerpt: In December 2012, as a kick-off to the Federal Reserve System's centennial, the Federal Reserve Bank of Cleveland asked leading monetary historians and macroeconomic economists to address current and recurring economic concerns that confront central banks from a historical perspective. The resulting papers, published in this volume, cover a wide range of issues, including the meaning of central-bank independence, the role of communications and rules in fostering credibility, the evolution of the lender-of-last-resort function, the mechanism through which banks transmit economic shocks, and prospects for a European monetary union. A retrospective on the Federal Reserve, this book contains essays by some of the world's most prominent financial historians and provides a thorough overview of the evolution of the monetary standard over the past two centuries. Offering historical context as a complement to economic theory and empiricism, these papers investigate how financial infrastructure shapes economic outcomes through comparisons of Canada and the United States.

Download or read book Essays on Macroeconomics and Financial Stability written by Pablo Garcia Sanchez and published by . This book was released on 2018 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The 2008 crisis and the ensuing Great Recession shook the consensus on how to run economic policy. They reminded us that financial imbalances could significantly derail economic activity. In addition, they showed that existing policy tools did not guarantee macro-financial stability; thereby leading to a rethink of monetary policy and financial regulation. Such a reevaluation has prompted a call for macroprudential tools, i.e., those tools intended for limiting systemic risk and ensuring the resilience of the financial sector. Besides, it has raised new questions about monetary policy and its effects on the risk taking behavior of economic agents - the so-called risk taking channel. A decade from the beginning of the crisis, the contours of a new policy framework for economic and financial stability are still very unclear. Knowledge on which regulatory instruments and how to employ them to curb the buildup of imbalances is limited. Neither is much known about the costs of those instruments.Regulatory intervention constraints some behaviors and distorts the allocation of resources. Consequently, the risk of imposing insidious costs on economic growth must not be underestimated. Likewise, very little is known about the relationship between monetary policy and the perception and pricing of risk by market participants. Nonetheless, it is natural to think that the monetary policy stance may affect the risk taking behavior of economic units, by influencing the attitudes towards risk and the assessment of risks. If so, failure by monetary authorities to consider this phenomenon could exacerbate boom bust patterns. The aim of this thesis is to explore the path towards macroeconomic and financial stability. I have basedmy work on the modern dynamic macroeconomic methods and techniques. Specifically, the first essay develops a canonical real business cycle model to assess the macroeconomic consequences of bank capital requirements, arguably the most used prudential tool. The second essay zooms in on the banking sector, and proposes a structural dynamic model with a large number of heterogeneous banks. The model is employed to study the effectiveness of interbank exposure limits. Having analyzed regulatory intervention, the last essay uses time series econometrics to shed some light on the risk taking channel of monetary policy. It is my firm belief that macroeconomics models for financial stability analysis should consider nonlinear patterns such as state dependence, asymmetries and amplification effects. Under unusual conditions like financial booms or credit crunches, economic agents behave differently than during normal times. In other words, the inner workings of the macroeconomy become essentially nonlinear under abnormal circumstances. Therefore, local behavior around the long run equilibrium of the economy is unlikely to contain relevant information about what may happen in exceptional events. In consequence, I study macroeconomic policy exclusively through the lens of nonlinear frameworks and techniques. Regarding the main results, this thesis makes a strong case in favor of macroprudential regulation. I provide clear evidence suggesting that regulatory intervention can be a powerful tool to strengthen financial resilience, reduce economic volatility and smooth business cycles. In addition, this thesis shows that accommodative monetary policy can produce overconfidence among market participants; thereby increasing risk taking and contributing to the buildup of imbalances. In other words, it provides empirical evidence for the existence of a risk taking channel of monetary policy.