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. 34, No. 2, May

A Reexamination of the Predictability of Economic Activity Using the Yield Spread
A LARGE LITERATURE has examined variables that help predict the business cycle. Interest rates and interest rate spreads--that is, differences between interest rates on alternative financial assets--have attracted considerable attention from market...
Are Oil Shocks Inflationary? Asymmetric and Nonlinear Specifications versus Changes in Regime
IT IS WIDELY BELIEVED that commodity and other price shocks at least partially "pass through" into core inflation. The dramatic rise in oil prices over 1999-2000 places a premium on an accurate assessment of that passthrough: Figure 1 shows that...
Complementarities and Comovements
POSITIVE COMOVEMENT between different sectors of the economy is a salient feature of business cycles. Over the period 1959-1986, for instance, the average pairwise correlation of annual employment growth for the 126 three-digit U.S. manufacturing...
Did Banks' Security Affiliates Add Value? Evidence from the Commercial Banking Industry during the 1920s
BEFORE THE GLASS-STEAGALL ACT of 1933, close ties between commercial and investment banks in U.S. financial markets were common. According to Carosso (1970), during the 1880s it was typical for investment bankers to form syndicates with powerful...
Expected Social Welfare under a Convex Phillips Curve and Asymmetric Policy Preferences
RESEARCHERS OF MONETARY POLICY have put forward a range of arguments in support of alternative specifications of the short-run U.S. Phillips curve. Clark, Laxton and Rose (1996), Debelle and Laxton (1997), Tambakis (1999) and Turner (1995) propose...
Openness, Inflation, and the Phillips Curve: A Puzzle
THIS PAPER INVESTIGATES the possible link between openness to trade and the slope of the output-inflation trade-off or Phillips curve. Open economy macroeconomic models, and informal discussion, often suggest that the slope of the trade-off should...
Partial Adjustment and Staggered Price Setting
A RAPIDLY GROWING LITERATURE embeds nominal price rigidity into otherwise standard dynamic general equilibrium (or "real business cycle"-type) models. This paper compares two popular nominal price rigidity specifications, the partial adjustment...
Private Transfers, Borrowing Constraints and the Timing of Homeownership
PRIVATE TRANSFERS are one of the most important modes of economic interaction between family members, and as such they can support investment in education, overcome borrowing constraints, help maintain or reduce disparities in wealth and consumption....
Signal Jamming in New Credit Markets
LENDERS INITIATING CREDIT RELATIONS with new borrowers frequently face problems due to imperfect information. If these problems cannot be fully resolved prior to the actual incidence of borrowing, then the subsequent interaction between the lender...
The Effects of Monetary Policy in Japan
MEASURING THE EFFECTS of monetary policy on aggregate activity has long been a central issue in quantitative monetary economics. Since the work of Sims (1980), structural vector autoregressive (VAR) methodology is developed and widely applied to...
The Equilibrium Degree of Transparency and Control in Monetary Policy
CENTRAL BANKS have a reputation for secrecy. Policy boards of central banks generally deliberate in secret, like judicial panels. In sharp contrast with other policymaking and judicial bodies in most major democracies, however, central-bank policy...
The Market for Electronic Cash Cards
MODERN ECONOMIES use a wide variety of means of payments. The most widely used payment instruments today are currency, payment orders, checks, debit cards, and credit cards. Among these means of payments only currency, which is legal tender, provides...
The Timing of Partisan and Nonpartisan Appointments to the Central Bank: Some New Evidence
ECONOMISTS, POLITICIANS, AND OTHERS in the United States have debated the concept of central bank autonomy since the legislative proposals leading up to the Federal Reserve Act of 1913. As pointed out by Waller (1992), the main channels of academic...
"Water Seeks a Level": Modeling Bimetallic Exchange Rates and the Bimetallic Band
Uncompromising monometallists have pointed to the variation in the value of gold and silver [...] as disproving the possibility of maintaining a legal ratio. They might as well point to the tipples of a pond [...] as disproving the fact that water...