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. 4, June

Does Urgency Affect Price at Market? an Analysis of U.S. Treasury Short-Term Finance
THIS PAPER CONSIDERS whether timeliness of requests, that is to say "urgency," impacts terms for borrowers. Specifically, it considers the market for unscheduled issuance of U.S. Treasury debt in the form of Cash Management Bills (CMBs) and compares...
Endogenous Deposit Dollarization
IN MANY EMERGING markets domestic financial intermediation is carried out in two (or more) currencies. Since the dollar is generally the main foreign currency of choice, this phenomenon has been named financial dollarization in the literature. Financial...
Financial Development, Financial Fragility, and Growth
THIS PAPER ANALYZES the apparent contradiction between two strands of the literature on the effects of financial intermediation on economic activity. On the one hand, the empirical growth literature finds a positive effect of measures of private domestic...
How Important Is Precommitment for Monetary Policy?
INSTITUTIONS AND POLICY regimes can have widespread and important implications for social welfare. This is as true for monetary policy as it is for other policymaking contexts. Within the monetary policy literature the assumption of rational expectations...
How to Compare Taylor and Calvo Contracts: A Comment on Michael Kiley
"COMPARISON OF THESE models is simple. Suppose that the average length of time between price changes for a firm in each model are equal (N = [[pi].sup.-1]), which is the standard assumption used throughout the literature" In a recent thoughtful...
Human Capital, Weak Identification, and Asset Pricing
THE EPSTEIN AND ZIN (1991) and Well (1990) state-nonseparable recursive preferences disentangle risk aversion from intertemporal substitution of consumption. When the isolation of these two aspects of human preferences is conceptually important, it...
Is the Exchange Rate a Shock Absorber or a Source of Shocks? New Empirical Evidence
ACCORDING TO THE OPTIMAL CURRENCY AREA (OCA) literature, a significant cost for a country joining a monetary union is the loss of its independent monetary policy and a flexible exchange rate to act as a stabilizer against idiosyncratic shocks. In an...
Lessons from the JMCB Archive
IN MARCH 1989 at the University of Utah, Stanley Pons and Martin Fleischman claimed to have produced "cold fusion" which, if true, would have led to an almost limitless supply of cheap energy. Upon the announcement, researchers around the world began...
Performance Changes around Bank Mergers: Revenue Enhancements versus Cost Reductions
HISTORICALLY IN THE UNITED STATES, the ability of commercial banks to expand domestically has been constrained by regulation. For example, at the beginning of the 20th century most U.S. banks were unit banks consisting of a single office. Throughout...
The Liquidity Effect in the Federal Funds Market: Evidence from Daily Open Market Operations
THE ABILITY OF the Federal Reserve to control the federal funds rate is taken for granted. Each morning, the trading desk (the Desk) at the Federal Reserve Bank of New York (FRB-NY) conducts open market operations to adjust the supply of reserves in...
Transactions Cost and Interest Rate Rules
THE ROLE OF money in business cycles has long been studied by macroeconomists. This paper evaluates quantitatively the effects of real money balances in a New Keynesian framework. Recently, the forward-looking models with nominal price rigidity assumption...
Unbiased Estimation of the Half-Life to PPP Convergence in Panel Data
WE ARE INTERESTED in obtaining accurate measurements of the convergence rate to purchasing power parity (PPP) because of its role in informing theoretical work on the role of nominal rigidities and on the relative importance of nominal and real shocks...
Who Should Act as Lender of Last Resort? an Incomplete Contracts Model: A Comment
IN COMPLEX MODERN ECONOMIES, separate authorities commonly police overlapping regulations. Conflicts between the objectives and requirements of these authorities pose problems for the designers of regulatory institutions. By recognizing that regulators...