Loan commitments and optimal monetary policy

Article Abstract:

An equilibrium model of financial intermediation with loan commitments is presented and used in the examination of the welfare consequences of alternative monetary policies. It is considered that if demand uncertainty is associated to the number of borrowers rather than to the individuals' demand for credit, an interest-rate smoothing policy is optimal. This is because efficiency decreases when loan commitments are negotiated in advance, with the use of 'tight money' resulting in asymmetric effects on different categories of borrowers.

Commercial Banks, Mortgage and Nonmortgage Loan Brokers, Consumer Loans, Interest Rates, Models, Loans, Personal loans

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The identification of monetary policy disturbances: explaining the liquidity puzzle

Article Abstract:

There have been several recent studies on the identification of monetary policy disturbances. These studies used interest rates and monetary aggregates to measure exogenous policy disturbances. However, problems hound studies focusing on monetary aggregates. Although interest rates are much better than monetary aggregates in measuring policy disturbances, they are still faced by conceptual and empirical problems. To remedy this problem, a new method of identifying monetary policy using nonborrowed reserves is proposed.

Research, Reserves (Accounting)

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Pioneering price level targeting: the Swedish experience 1931-1937

Article Abstract:

Research was conducted to investigate the evolution of the price level targeting experienced by Sweden from 1931 to 1937 in its attempt to stabilize domestic price level. Various issues and concepts relevant to inflation targeting and central bank policies were used as a starting point. The Swedish price level targeting was ended when the government realized that it is not sufficient to save the country from depression.

Administration of General Economic Programs, Currency Stabilization Programs, Economic aspects, Sweden, Economic policy, Inflation (Finance), Currency stabilization, Inflation (Economics)

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