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. 38, No. 3, April

Accounting for the East Asian Crisis: A Quantitative Model of Capital Outflows in Small Open Economies
IN THE MIDDLE of 1997, a number of East Asian economies underwent a common financial crisis. South Korea, Malaysia, and Thailand all experienced severe exchange rate devaluations and current account reversals. In each economy, the currency devaluations...
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A Model of Financial Structure and Financial Fragility
This paper presents a model of financial structure based on asymmetric information about credit quality and adverse selection between banks, which have good information but high costs, and securities markets, which have low costs but worse information....
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Foreign Currency Pricing
Q: What is the difference between one dollar and one ruble? A: One dollar. (A Russian joke of early 1990s) THIS PAPER ANALYZES a particular form of dollarization--the quotation of prices of goods and services in dollars instead of local currency....
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Have Increases in Federal Reserve Transparency Improved Private Sector Interest Rate Forecasts?
THE 1990s AND early 2000s witnessed an unprecedented increase in central bank transparency, with New Zealand, Canada, the UK, Sweden, Finland, Israel, Australia, Spain, the European Central Bank, Norway, and several developing countries all adopting...
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Heterogeneous Agents and Uninsurable Idiosyncratic Employment Shocks in a Linearized Dynamic General Equilibrium Model
MUCH OF THE MACROECONOMIC literature is based on stochastic dynamic general equilibrium models with a representative consumer. Closed form solutions of these models usually do not exist, while numerical simulations tend to veil their mechanics. Campbell...
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How Have Borrowers Fared in Banking Megamergers?
DIFFERENCES IN RELATIVE bargaining power inevitably affect the outcome of bilateral negotiations. In banking, bargaining takes place in three arenas: between banks and their regulators; between banks and their customers; and between acquiring institutions...
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Inflation and Costly Price Adjustment: A Study of Canadian Newspaper Prices
SINCE KEYNES (1936), a central issue in macroeconomics has been the rigidity of nominal prices. The development of microfoundations of macroeconomics in the last 20 years has, if anything, increased the importance of this issue. In fact, it has become...
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Inflation Persistence and Optimal Monetary Policy in the Euro Area
IN THIS PAPER we examine the idea that in the euro area monetary policy should be conducted so as to eliminate, or at least mitigate, the distortions in relative prices that might arise because of the differences in the degree of adjustment of inflation...
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Institutions of Foreign Exchange Settlement in a Two-Country Model
FUJIKI (2003) demonstrates the possibility of efficiency gains in monetary equilibrium from the combination of an elastic money supply in the foreign exchange market, to clear the exchange of fiat monies at gold standard parity, and an elastic money...
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New Evidence on the Lending Channel
BANK LOANS MIGHT be special, but should macroeconomists care? Researchers have recently developed evidence consistent with a bank lending channel of monetary policy, where the effect of policy on bank lending is amplified by the inability of some banks...
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Taylor Rules and Macroeconomic Instability or How the Central Bank Can Preempt Sunspot Expectations
THE TAYLOR RULE (1993) provides a good description of how many central banks attempt to set interest rates in order to achieve stable prices while avoiding large fluctuations in output and employment. There is evidence, however, that Taylor rules can...
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The Neoclassical Growth Model with Heterogeneous Quasi-Geometric Consumers
QUASI-GEOMETRIC (hyperbolic) discounting is a form of time-inconsistency in preferences when the discount factor, applied between today and tomorrow, is different from the one employed for any other date further in the future. The first studies on...
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Using the Aggregate Demand-Aggregate Supply Model to Identify Structural Demand-Side and Supply-Side Shocks: Results Using a Bivariate VAR
Vector autoregression (VAR) analysis has been a popular tool for analyzing the dynamic properties of economic systems since Sims's (1980) influential work. Research on the relationship between VARs and structural econometric models has made possible...
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