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. 41, No. 4, June

Are Competitive Banking Systems More Stable?
WHEN BANKS COMPETE, does it make banking crises more frequent? A rationale for regulating banks is that too much competition among them could threaten the solvency of individual institutions and ultimately threaten stability of the banking system....
Can Affine Term Structure Models Help Us Predict Exchange Rates?
THE OBJECTIVE OF this paper is to evaluate whether imposing no-arbitrage restrictions on the temporal evolution of interest and exchange rates can help predict exchange rates out of sample. In our model, prediction is based on the information embedded...
Daily Changes in Fed Funds Futures Prices
THE FEDERAL FUNDS rate is of considerable interest in economics and finance, both because it defines the shortest end of the term structure (the overnight rate being the shortest-maturity U.S. asset traded) and because it is the rate directly targeted...
Determinants of Bank-Market Structure: Efficiency and Political Economy Variables
Market structure attracts attention in the economics and industrial organization literature because of its connection with market competitiveness and social welfare. Two potential determinants of market structure come to the fore in the literature:...
Do Mergers Improve Information? Evidence from the Loan Market
THE UNPRECEDENTED MERCER wave observed in the last decade is reshaping the corporate landscape in most countries, in mature and innovative sectors alike. According to Thomson Financial, between 1990 and 2001 there were 54,143 M&As in the major...
Inflation Persistence, Monetary Policy, and the Great Moderation
THERE IS GROWING evidence that the time-series behavior of U.S. inflation is changing. The most notable change is the decline in inflation persistence. For example, in a reduced-form model Cogley (2005) and Cogley and Sargent (2007) show that inflation...
Moderate Inflation and the Deflation-Depression Link
POLICYMAKERS SINCE THE Great Depression have been concerned that deflation can lead to lower growth rates, if not recessions, and the recent Japanese experience has exacerbated such concerns (see Krugman 1998). However, theoretical models offer differing...
Monetary Policy in a Forward-Looking Input-Output Economy
Recent years have witnessed significant innovations in monetary policy as many central banks have adopted inflation targeting as their objective. Bernanke et al. (1999) and King (2005) have noted that, in general, countries that have adopted inflation...
Regulation and the Neo-Wicksellian Approach to Monetary Policy
THE NEO-WICKSELLIAN approach to optimal monetary policy uses estimates of the neutral real interest rate, often in a Taylor rule. In a system with investment saving (IS) and output-gap inflation equations, Laubach and Williams (2003) use a Kalman filter...
Uncovering the Hit List for Small Inflation Targeters: A Bayesian Structural Analysis
IN THE RECENTLY POPULAR CLASS of dynamic stochastic general equilibrium (DSGE) models, private economic agents such as consumers and firms are often modeled as optimizing decision makers. However, central bank behavior is typically described by a reduced-form...
Which Microfinance Institutions Are Becoming More Cost Effective with Time? Evidence from a Mixture Model
MICROFINANCE INSTITUTIONS, OR MFIs, serve as important providers of credit to poorer borrowers and thus can play a significant role in programs to alleviate poverty and promote economic opportunity in nations around the world (Morduch 1999a, Zohir...