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. 33, No. 3, August

Evaluating the Basle Guidelines for Backtesting Banks' Internal Risk Management Models
The 1996 Amendment to the Basle capital accord to incorporate market risks constitutes a breakthrough in the determination of capital requirements. Rather than dictating these requirements through a uniform supervisory approach, banks are allowed to...
Fiscal Requirements for Price Stability
Maintaining price stability requires not only commitment to an appropriate monetary policy rule, but an appropriate fiscal policy rule as well. Ricardian equivalence does not imply that fiscal policy is irrelevant, except in the case of a certain class...
How Sure Are We about Purchasing Power Parity? Panel Evidence with the Null of Stationary Real Exchange Rates
This article presents evidence on mean reversion in industrial countries' real exchange rates in a setup that accounts naturally for cross-sectional dependence, is invariant to the benchmark currency, and actually tests for the null of interest, that...
Is It Possible That an Independent Central Bank Is Impossible? the Case of the Australian Notes Issue Board, 1920-1924
The history of the Australian Notes Issue Board over the period 1920-1924 is presented. It is shown that the Board was created as a genuinely independent monetary authority, but was soon abolished, as its policies antagonised interests upon which the...
Is Purchasing Power Parity Overvalued?
The purpose of this paper is to reexamine the hypothesis of long-run purchasing power parity among industrial countries under the current float using the panel data approach. We propose a new finite-sample panel data unit root test procedure that allows...
Production Smoothing When Bank Loan Supply Shifts: The Role of Variable Capacity Utilization
How do firms smooth production when facing financing uncertainty? By using a model incorporating financing constraints, this paper shows that firms may adjust capacity utilization rates to buffer against financing disturbances. In particular, it emphasizes...
The Choice of Numeraire Currency in Panel Tests of Purchasing Power Parity
We investigate the implications of the choice of numeraire currency on panel tests of purchasing power parity under the current regime of flexible exchange rates by conducting panel unit root tests with twenty-one different base currencies. We show...
The Effect of Credit Scoring on Small-Business Lending
This paper examines the effect of credit scoring on small-business lending for a sample of large U.S. banking organizations. We find that credit scoring is associated with an 8.4 percent increase in the portfolio share of small-business loans, or $4...