Journal of Money, Credit & Banking

Reports major findings in the study of financial institutions, financial markets, monetary and fiscal policy, credit markets, money and banking.

Articles from Vol. 37, No. 6, December

Do Loan Commitments Cause Overlending?
TWO ISSUES HAVE recently preoccupied policymakers in financial markets. The first is the role of banks in the business cycle. As banks expand and contract the availability of credit to firms, they affect corporate investments and economic activity....
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Inflation Dynamics, Marginal Cost, and the Output Gap: Evidence from Three Countries
RECENT CONTRIBUTIONS by Gali and Gertler (GG) (1999), Gali, Gertler, and Lopez-Salido (GGL) (2001, 2002), and Sbordone (2001, 2002) have provided empirical support for what Roberts (1995) termed the "New Keynesian Phillips curve" (NKPC). These are...
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Inflation, Presidents, Fed Chairs, and Regime Shifts in the U.S. Real Interest Rate
THERE IS A significant body of evidence indicating that the U.S. real interest rate undergoes infrequent, but significant, mean shifts. Garcia and Perron (1996 [hereafter GP]), Bai and Perron (2003 [hereafter BP]), and Caporale and Grier (2000 [hereafter...
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Joint Implications of Consumption and Tax Smoothing
OVER SEVERAL decades the permanent income hypothesis progressively became a central tenet of macroeconomics. More recently, the tax smoothing hypothesis also came of age, with a detailed account of it having been included in the second edition of Romer's...
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Monetary Policy in a Low Pass-Through Environment
RECENTLY WE HAVE witnessed a growing interest in macroeconomics for small-scale models applied to the analysis of monetary policy. The so-called New Keynesian synthesis, exemplified by the work of Clarida, Gall, and Gertler (1999) and Woodford (2003),...
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Sticky Information: The Impact of Different Information Updating Assumptions
A STANDARD EXPLANATION for the real effects of changes in the money supply is nominal price rigidity. If firms face sufficiently large costs of nominal price adjustment, they will hold nominal prices constant for a period of time. An increase in the...
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Structural Distortions and Decentralized Fiscal Policies in EMU
THE ADVENT OF THE EUROPEAN MONETARY UNION (EMU) has given rise to a lively debate about the appropriate relationship between centralized monetary policy, on one hand, and decentralized fiscal and structural policies, on the other. Does the EMU require...
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The Real Output Losses Associated with Modern Banking Crises
THERE IS A GENERAL perception that banking crises are associated with--and perhaps the cause of large economic disruptions. In the historical United States, for example, virtually every major recession between the end of the Civil War and the beginning...
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What Macroeconomic Risks Are (Not) Shared by International Investors?
IF MARKETS WERE complete and if there were no transport costs, the standard economic theory predicts that we would have perfect risk sharing across national borders. In such a case, the growth rates of marginal utility would be equal across countries...
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