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. 5, August

Consumption Habits in a New Keynesian Business Cycle Model
CONSUMPTION HABITS ARE a key component in modern New Keynesian business cycle models. (1) They are relied on to explain movements in aggregate consumption data and to generate the "hump-shaped" impulse responses widely recognized to characterize the...
Corrigendum to "Regime Changes in International Real Interest Rates: Are They a Monetary Phenomenon?"
I PROVIDE CORRECTIONS to some of the previous empirical findings published in Journal of Money, Credit and Banking, Vol. 37, No. 5 (October 2005) by Rapach and Wohar on multiple structural breaks in mean real interest rates and inflation rates from...
Optimal Monetary Policy with an Uncertain Cost Channel
MONETARY POLICYMAKERS TYPICALLY face uncertainty about key relationships describing the economy. Uncertainty potentially disguises the true economic model that governs the economy, disturbs parameters, and introduces noise into the data series available...
Payments Settlement: Tiering in Private and Public Systems
WHEN TRADE IS decentralized, and agents are not completely reliable, collateral is useful for effecting exchange. However, collateral is expensive and can be subject to shortages, temporary or permanent. When shortages occur, spot transactions--transactions...
Price and Investment Dynamics: Theory and Plant-Level Data
"This seeming inabilility to find a significant (and consistent!) impact of demand is surprising." (Nordhaus 1972, p. 35) IN CLASSICAL MICROECONOMIC models, product prices move in such a way as to stabilize production. If demand increases, firms...
Religion and Female Educational Attainment
HUMAN CAPITAL IS but one factor affecting economic growth. In fact, much of a country's productivity advances can be explained by increased human and physical capital (Baier, Dwyer, and Tamura 2006). By numerous accounts, female education is an important...
Role of Collateral and Personal Guarantees in Relationship Lending: Evidence from Japan's SME Loan Market
A KEY ISSUE of interest in the recent literature on financial intermediation has been the role of relationship lending. Relationship lending is particularly common in the case of small business lending because small businesses typically rely on bank...
The Global Side of the Investment-Saving Puzzle
SINCE IT WAS first highlighted by Feldstein and Horioka (1980), the substantial correlation between national investment and saving in industrial countries, despite international capital flows, has become one of the most resilient puzzles in international...
The Response of Hours to a Technology Shock: A Two-Step Structural VAR Approach
THE RESPONSE OF hours to a technology shock is the subject of many controversies in quantitative macroeconomics. The contributions of Gall (1999), Basu, Fernald, and Kimball (2006), and Francis and Ramey (2005) show that the short-un response of hours...
Unbiased Estimation of the Half-Life to Price Index Convergence among U.S. Cities
AN ADVANTAGE OF examining real exchange rates (relative prices) between cities within a single country is that some of the plausible explanations for slow convergence or for the complete breakdown of international purchasing power parity (PPP), such...
Voting Transparency in a Monetary Union
NOWADAYS, MANY CENTRAL banks publish voting records and the minutes of their meetings. Among them are the Bank of England and the Bank of Japan. However, the European Central Bank (ECB) has always insisted on keeping the details of the decision-making...
Wealth Distribution, Inflation Tax, and Societal Benefits of Illiquid Bonds
IN HIS FAMOUS PAPER, Hicks (1935) noted the coexistence of money and assets with higher returns as the greatest challenge facing monetary theory. Since then there have been two streams of the coexistence literature. One is to rationalize the coexistence...