T he present paper investigates the impact of the financial crisis on the interaction between the lending rates, deposit rates and money market rates through the process of retail bank interest rate pass-through in the countries of the Euro area. Among our findings is the heterogeneity of bank rate adjustments across sectors, loans and deposits. That was mainly marked during the pre-...

In many economies, commodity price volatility is one of the sources of signaling to market players. Different experiences of price shocks have led economists to reconsider price shocks. Considering the effects of monetary policy on the inflation rate, the present study investigates the impact of monetary policy shock on the price of storable food commodities. In this regard, data for 2006: 01 t...

The interest rates that banks pay on deposits move more slowly than money-market interest rates, a phenomenon documented in several recent studies (Flannery [1982], Hannan and Berger [1991], and Neumark and Sharpe [1992]). Understanding deposit-rate sluggishness has important direct consequences for comprehending money demand and bank profitability, as well as indirect consequences for understa...

This study investigates the effects of  macroeconomic variables and their role in development of foreign exchange market. The foreign exchange market is the mechanism by which a person of firm transfers purchasing power form one country to another, obtains or provides credit for international trade transactions, and minimizes exposure to foreign exchange risk. The foreign exchange transaction i...

This paper incorporates a distortionary tax into a microfoundations of money framework and revisits the optimum quantity of money. The money constraint in the decentralized market plays a key role in the optimal policy. Only if the constraint is binding can fiscal policy alter the agents’ surplus shares; monetary, but not fiscal, policy affects the agents’ bargaining position, leaving a special...

Abstract By the first welfare theorem, competitive market equilibria belong to core and hence are Pareto optimal . Letting money be a commodity, this paper turns these two inclusions around. More precisely, by generalizing second theorem we show that said solutions may coincide as common fixed point for one same system. Mathematical arguments invoke conjugation, convolution, generalized gradien...

This paper examines the role of money in understanding the behavior of asset prices and whether and how monetary policy should react to asset prices such as stock prices and equity premiums. To do so, I introduce money via the form of transaction cost into a production economy with limited stock market participation where agents with lower inter-temporal elasticity of substitution (IES), called...