A model of target changes and the term structure of interest rates

Article Abstract:

A series of theoretical models has been developed in an attempt to assess the impact of interest rate target changes on the behavior of term structure of interest rates. It has been found that term spreads between short-term rates and overnight federal funds are influenced by expectations of changes in the target, rather than transitory dynamics. This concept may explain the existence of biases in making expectation hypothesis. Through the use of data released by the Federal Reserve Bank of New York, the analysis also made use of new series of interest rate charges.

Research, Federal Reserve banks

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The advantage to hiding one's hand: speculation and central bank intervention in the foreign exchange market

Article Abstract:

An asymmetric information, one-period model has been designed to evaluate the efficiency of adopting intervention operations in controlling exchange rates. It has been found that sterilized intervention can efficiently be used by central banks to predict future spot rate, disclose information about the target and provide accurate and substantial information to spectators. However, banks must be able to counterbalance the effect of fundamentals on the spot exchange rates in order to alleviate the risk of losses.

Administration of General Economic Programs, Currency Stabilization Programs, Management, Central banks, Intervention (Federal government), Federal intervention, Currency stabilization

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Money and credit as means of payment

Article Abstract:

The interaction between money and credit as means of payment is determined. The model of transaction costs related with the use of credit in exchange shows that the sensitivity of velocity depends on the varying structure of nominal interest rates. Models with impediments to specified exchange will obtain different empirical implications compared to models of frictionless environments.

Credit Management, Models, Money, Credit

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