Financial market frictions, monetary policy, and capital accumulation in a small open economy

Article Abstract:

The effects of an increase in the money growth rate in a small market economy with costly state verification requirements and binding reserve requirement is found to be inversely proportional to the output of the low-capital steady stock state. However, the mechanism is found to produce an increase in the output of the high-capital-stock steady state, with the stock easily decreased when steady state inflation is not too high.

Econometrics & Model Building, Analysis, Economics, Econometrics, Financial markets, Capital formation, Business models

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Economic growth, liquidity, and bank runs

Article Abstract:

An endogenous growth model is constructed which shows that the mere possibility of runs in a given period have a large impact on all future periods. A bank run in the model is triggered by sunspots and When the choices of an individual bank affect the probability of a run on that bank, the economy both grows faster and experiences fewer runs .

Commercial Banking, DEPOSITORY INSTITUTIONS, Deposit Money Banks, Equilibrium (Economics), Bank runs, Deposit banking, Depositories (Banking)

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Monetary stability and liquidity crises: The role of the lender of last resort

Article Abstract:

The desirability of an elastic currency and the role of the lender of last resort in printing money and lending it to banks in distress is considered.

Research, Elasticity (Economics)

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