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. 35, No. 4, August

A Two-Sector Approach to Modeling U.S. NIPA Data
The one-sector Solow-Ramsey model is the most popular model of long-run economic growth. This paper argues that a two-sector approach, in which technological progress in the production of durable goods exceeds that in the rest of the economy, provides...
Does the Japanese Stock Market Price Bank-Risk? Evidence from Financial Firm Failures
The ability of the Japanese stock market to appropriately price the riskiness of Japanese financial firms has been frequently questioned, particularly in light of Japan's widespread financial distress in recent years and poor disclosure requirements....
Expectations and the Effects of Monetary Policy
This paper examines the predictive power of shifts in monetary policy, as measured by changes in the real federal funds rate, for output, inflation, and survey expectations of these variables. We find that policy shifts have larger effects on actual...
Macroeconomic Stability and the Preferences of the Fed: A Formal Analysis, 1961-98
The rate of inflation in the U.S. has declined from an average of 4.5% in the period 1960-79 to an average of 3.6% in 1980-98. Between those two periods, the standard deviations of inflation and the output gap have also declined. These facts can be...
Monetary Policy, Housing, and Heterogeneous Regional Markets
We quantify the importance of heterogeneity for monetary policy using a new heterogeneous-agent VAR (HAVAR) model that integrates national monetary/financial markets with regional housing markets via the mortgage rate. Although the HAVAR model has...
Money, Social Status, and Capital Accumulation in a Cash-in-Advance Model. (Comments)
Using Gong and Zou's (2001) model, we reexamine the steady-state effect of monetary growth on the capital stock in the presence of a wealth-induced social status. We find that inflation negatively affects the long-run capital stock if all investment...
Settlement Risk under Gross and Net Settlement
Previous comparative analyses of gross and net settlement have focused on the credit risk of the central counterparty in net settlement arrangements and on the incentives for participants to alter the risk of their portfolios under net settlement....
Short-Term Loans and Long-Term Relationships: Relationship Lending in Early America
Recent banking theory holds that durable firm-bank relationships are valuable to both parties. This paper uses the contract-specific loan records of a 19th-century U.S. bank and shows that firms with extended relationships received three principal...
Targeting Inflation by Constant-Interest-Rate Forecasts
This paper reviews the concept of constant-interest-rate inflation forecast (CIR) targeting. It stresses the time-inconsistent nature of CIR targeting and provides a new method for constructing CIR forecasts consistently in the context of models with...