Financial intermediation and monetary policy in a general equilibrium banking model. (includes related articles): An article from: Journal of Money, Credit & Banking
Price not available for India
You can still browse on Amazon. Try another country above.
Book Details
Publisher
Ohio State University Press
ISBN / ASIN
B00093TC0W
ISBN-13
978B00093TC02
Marketplace
India 🇮🇳
Ratings & Reviews
No reviews yet — be the first!
No reviews yet.
Description
This digital document is an article from Journal of Money, Credit & Banking, published by Ohio State University Press on November 1, 1995. The length of the article is 8964 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
From the supplier: A general equilibrium model of banking is developed to study the following issue: when does expansionary monetary policy result in an increase in lending, and when does the policy simply lead to more inflation. Banks are required to hold nominal reserves and have access to deposit insurance; the financial structure results in a determinate deposit-equity ratio. Monetary policy is implemented by open-market operations and changes in nominal reserves and the policies are linked through the government's budget constraint. In this model, monetary policy has real effects because it can affect the amount of real wealth transferred between savers and dissavers, which in turn affects the leading decisions of banks and, hence, real output. The bank acts as a financial intermediary between producers and savers (households) and the government and households. The intermediation process between producers and savers is based on the Gale and Hellwig (1985) model in which there is credit rationing because of asymmetric information and costly state verification. When banks are able to write state-contingent standard debt contracts and monitoring costs are indexed for inflation, government reserve policy and open market operations have no real effects. This occurs despite reserve requirements, deposit insurance and the determinate deposit-equity ratio. While these policies increase the nominal assets in the banking sector, prices increase so that real lending and consumption allocations are unchanged. When monitoring costs are no longer perfectly indexed for inflation, in particular, monitoring costs rise (fall) by a smaller percentage than prices increase (decrease), an increase in reserves or open market operations increases real lending and prices. (Printed by permission of the publisher.)
Citation Details
Title: Financial intermediation and monetary policy in a general equilibrium banking model. (includes related articles)
Author: Pamela Labadie
Publication:Journal of Money, Credit & Banking (Refereed)
Date: November 1, 1995
Publisher: Ohio State University Press
Volume: v27 Issue: n4 Page: p1290(31)
Distributed by Thomson Gale
From the supplier: A general equilibrium model of banking is developed to study the following issue: when does expansionary monetary policy result in an increase in lending, and when does the policy simply lead to more inflation. Banks are required to hold nominal reserves and have access to deposit insurance; the financial structure results in a determinate deposit-equity ratio. Monetary policy is implemented by open-market operations and changes in nominal reserves and the policies are linked through the government's budget constraint. In this model, monetary policy has real effects because it can affect the amount of real wealth transferred between savers and dissavers, which in turn affects the leading decisions of banks and, hence, real output. The bank acts as a financial intermediary between producers and savers (households) and the government and households. The intermediation process between producers and savers is based on the Gale and Hellwig (1985) model in which there is credit rationing because of asymmetric information and costly state verification. When banks are able to write state-contingent standard debt contracts and monitoring costs are indexed for inflation, government reserve policy and open market operations have no real effects. This occurs despite reserve requirements, deposit insurance and the determinate deposit-equity ratio. While these policies increase the nominal assets in the banking sector, prices increase so that real lending and consumption allocations are unchanged. When monitoring costs are no longer perfectly indexed for inflation, in particular, monitoring costs rise (fall) by a smaller percentage than prices increase (decrease), an increase in reserves or open market operations increases real lending and prices. (Printed by permission of the publisher.)
Citation Details
Title: Financial intermediation and monetary policy in a general equilibrium banking model. (includes related articles)
Author: Pamela Labadie
Publication:Journal of Money, Credit & Banking (Refereed)
Date: November 1, 1995
Publisher: Ohio State University Press
Volume: v27 Issue: n4 Page: p1290(31)
Distributed by Thomson Gale
