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. 39, No. 8, December

A Test of the Law of One Price in Retail Banking
THIS PAPER USES THE SPANISH retail banking market as a case study to investigate the workings of the Law of One Price (hereafter, LOP). Although economic integration and price convergence has been a topic of interest in international economics (1)...
Changes in the Federal Reserve's Inflation Target: Causes and Consequences
"INFLATION IS ALWAYS and everywhere a monetary phenomenon." Thus spoke Milton Friedman (1968, p. 39). Once controversial, Friedman's words now form part of conventional wisdom for academic economists and central bankers alike, provided they are...
Credit Reporting, Relationship Banking, and Loan Repayment
IN CREDIT MARKETS, borrowers typically have more information about their investment opportunities, their own character and their prior indebtedness than lenders. This asymmetry of information gives rise to selection problems for lenders and potential...
Monetary Policy and Stock Prices in an Open Economy
AN INTERESTING RECENT debate in the field of monetary policy has regarded whether the setting of short-term interest rates by Central Banks pursuing price stability should actively consider movements in stock prices. Such a debate developed in the...
Structural Error Correction Models: A System Method for Linear Rational Expectations Models and an Application to an Exchange Rate Model
As ROGOFF (1996) POINTED OUT, there had been a remarkable consensus on 3- to 5-year half-life estimates of the real exchange rates obtained by single equation methods. This consensus may at first seem to support the reliability of these estimates,...
The Determinants of Household Saving in China: A Dynamic Panel Analysis of Provincial Data
CHINA HAS ATTRACTED increasing attention because it is the world's most populous nation and because it has maintained phenomenal rates of economic growth in recent years. For example, the Asian Development Bank now projects that China will attain a...
The Value of Interest Rate Stabilization Policies When Agents Are Learning
We examine the expectational stability (E-stability) of rational expectations equilibrium in the "New Keynesian" model where monetary policy is optimally derived and interest rate stabilization is added to the central bank's traditional objectives...
Unemployment and Inflation Consequences of Unexpected Election Results
ALL MODERN INDUSTRIAL economies experience significant swings in economic activity. According to the traditional view, the role of politicians is to engage in attempts to smooth or even eliminate cyclical fluctuations of aggregate activity. However,...
Why Inside Money Matters
THIS NOTE INVESTIGATES efficient allocations in an environment with heterogeneous endowments and a cash-in-advance constraint, and compares fiat money issued by a government--or outside money--to privately issued liabilities--or inside money. Because...
Yesterday's Bad Times Are Today's Good Old Times: Retail Price Changes Are More Frequent Today Than in the 1890s
Among the economic phenomena of the present age, nothing has attracted more attention than the frequency changes to which the values of most commodities are subject. In the good old times in which the economists of the preceding generation lived, and...