This paper analyzes the way in which international …nancial integration a¤ects the transmission of monetary policy in a New Keynesian open economy framework. It extends Woodford's (2010) analysis to a model with a richer …nancial markets structure, allowing for international trading in multiple assets and subject to …nancial intermedia-tion costs. Two di¤erent forms of …nancial integration are ...

Abs t rac t . Our intent in this paper is to present a denotational model that supports both data and concurrency description. Data can be pure (concurrency free data such as literals) or processes. Concurrency is supported through processes that may communicate data and thus possibly processes through channels. Processes are thus sa~d:higher order communicating processes. Functions axe conside...

Firm cash holdings increased substantially from 1980 to 2013. The overall distribution of firm cash holdings changed in the same period. We study the implications of these changes for monetary policy. We use Compustat data and a model with financial frictions that allows the calculation of the monetary policy effects according to the distribution of cash holdings. We find that the interest rate...

The Federal Reserve has implemented policies during the past six years that rely on channels of transmission to the real economy that economic models have assumed to exist but seldom tested or on channels that were simply presumed not to exist. I discuss the board channels of monetary policy transmission that may allow forward guidance and balance sheet policies to affect the economy. The assum...

Understanding the channels through which monetary policy affects investment and other economic variables has long been a key research topic in macroeconomics. At an operational level, a “tightening” of monetary policy by a central bank implies a sale of bonds by the central bank and an accompanying reduction in bank reserves. One question for debate in academic and public policy circles is whet...

Purpose Considering the relationship between central bank balance sheet and unconventional monetary policy after 2008 financial crisis, it is crucial to see how policy, given near-zero interest rates, affects future stock market performance. This paper analyzes impact of Fed's size on Design/methodology/approach To analyze size's long-term implications, this uses asset pricing framework return ...

For economies in which the real rate of return on money is too low, the standard prescription is to deflate prices according to the Friedman rule. Implicit in this recommendation is the availability of a lump-sum tax instrument. In this paper, I view lump-sum tax obligations as a form of debt subject to default. While individuals may agree to honor such obligations ex ante, a lack of commitment...

One of the most important duties of financial economy is modeling and forecasting the volatilities of price of risky assets. From analysts and policy makers’ view, price volatility is a key variable contributing to perception of market volatilities. Therefore, analysts need to have an appropriate of forecast of price volatility as a necessary input to perform duties such as risk management, por...