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. 31, No. 1, February

Credibility, Reputation, and the Mexican Peso Crisis
Among the factors underlying the December 20, 1994, collapse of the Mexican peso, the role of economic fundamentals remains a matter of debate. While some commentators have stressed the role of loose fiscal policies and growing real appreciation, others...
Degrees of Processing and Changes in the Cyclical Behavior of Prices in the United States, 1869-1990
Many studies have compared the cyclical behavior of prices between historical periods. Such comparisons may help one judge between competing models of business cycles. The two main bodies of business cycle theory at present, real business cycle theory...
Fiscal Policy and the Mehra-Prescott Puzzle: On the Welfare Implications of Budget Deficits When Real Interest Rates Are Low
This paper examines the welfare implications of government budget deficits. The real return on U.S. government debt has historically been far below the average return on equities and substantially below the average rate of economic growth. If the interest...
Hayek's Monetary Theory and Policy: A Critical Reconstruction
Friedrich A. Hayek (1899-1992) was among the profession's leading monetary theorists on the eve of the Keynesian revolution. The goal of his early work on money, capital, and business cycles was, in Hayek's (1933 [1929], p. 33) own words, "the incorporation...
Is Intervention a Signal of Future Monetary Policy? Evidence from the Federal Funds Futures Market
The effect of foreign exchange market intervention on exchange rates is a subject of continuing controversy. Few doubt that unsterilized intervention may affect nominal exchange rates by changing interest rates and monetary aggregates. However, the...
Perspectives on Canadian Bank Insolvency during the 1930s
Carr, Mathewson, and Quigley (1995) (CMQ) challenge the hypothesis that Canadian banks enjoyed considerable capital forbearance during the 1930s (Kryzanowski and Roberts 1993) (KR). CMQ maintain that the absence of bank failures in Canada during the...
The Asymmetric Effects of Monetary Policy: A Nonlinear Vector Autoregression Approach
This paper investigates whether monetary policy has "asymmetric" effects on output and prices using a nonlinear vector autoregression approach. The model that is estimated is consistent with a wide variety of structural models, in particular, models...
The Value of a Government Monitor for U.S. Banking Firms
Financial markets will allocate real resources efficiently only if investors can reliably infer the true value of firms' debt and equity securities. In an effort to resolve investor uncertainties efficiently, individual firms rationally incur costs...
Use of Interest-Bearing Currency in the Civil War: The Experience below the Mason-Dixon Line
The legal restrictions theory of the demand for money (henceforth, LR) posits that interest-bearing notes are as suitable for circulation in exchange as non-interest-bearing notes.(1) For any level of asset quality (that is, risk of default), interest-bearing...