Browsing by Subject "E5"

Sort by: Order: Results:

Now showing items 1-6 of 6
  • Herrala, Risto (2012)
    Suomen Pankki. E 48
    Chapter 1 Introduction 11 Chapter 2 Reserve pools 23 Chapter 3 Public intervention and financial crises: an empirical study 43 Chapter 4 Credit conditions and durable consumption: evidence of a strong link 67 Chapter 5 The influence of bank ownership on credit supply: evidence from Russia's recent financial crisis 89 Chapter 6 Conclusions 109
  • Jinill, Kim; Ruge-Murcia, Francisco (2018)
    Bank of Finland Research Discussion Papers 4/2018
    This paper studies the implication of extreme shocks for monetary policy. The analysis is based on a small-scale New Keynesian model with sticky prices and wages where shocks are drawn from asymmetric Generalized Extreme Value distributions. A nonlinear perturbation solution of the model is estimated by the simulated method of moments. Under the Ramsey policy, the central bank responds nonlinearly and asymmetrically to shocks. The trade-off between targeting a gross inflation rate above 1 (or a net inflation rate above 0) as insurance against extreme shocks and targeting an average gross inflation at unity to avoid adjustment costs is unambiguously decided in favour of strict price stability.
  • Angrick, Stefan; Naoyuki, Yoshino (2018)
    BOFIT Discussion Papers 4/2018
    Monetary policy in most major economies has traditionally focused on control of the interbank interest rate to achieve an inflation target. Monetary policy in transition economies, in contrast, relied on a mixed system of price-based and quantity based instruments and targets. Japanese monetary policy up to the 1990s was based on such a mix, and echoes of this system are today found in China’s monetary policy set-up. We explore the transition of these two monetary policy regimes historically and quantitatively with institutional comparison and Structural Vector Autoregressive (SVAR) models. Specifically, we examine the role of the interbank rate and “window guidance,” a policy by which authorities use “moral suasion” to communicate target quotas for lending growth directly to commercial banks. In Japan’s case, we compile historical statistics on window guidance from newspapers and industry sources. For China, we apply Romer–Romer text analysis and computational linguistic techniques to policy reports to quantify information on window guidance.We empirically demonstrate the declining effectiveness of quantity measures and the increasing importance of price measures. We end with a policy assessment of managing the transition of monetary policy from a quantity-based system to a price-based system.
  • Korhonen, Iikka; Newby, Elisa (2019)
    BoF Economics Review 7/2019
    This study examines the Twitter policies and use of European central banks. Almost every European central bank maintains an institutional Twitter account, but tweeting activity, tweet content and usage restrictions on Twitter use by individual staff members vary considerably. We further consider the evolution of Twitter use by European central banks in light of the growing importance of financial stability in central bank policy messaging. To study these issues, we create a database of tweets from European central banks and financial supervisors, as well as attempt to gauge how closely professional economists follow central banks on Twitter. Central banks’ Twitter activity has no relation to citizens’ online participation. We also find that central banks’ communication on financial stability with Twitter has increased over time, especially in comparison with monetary policy.
  • Brand, Thomas; Isoré, Marlène; Tripier, Fabien (2019)
    Journal of Economic Dynamics and Control February
    Published in Bank of Finland Research Discussion Papers 34/2017.
    We develop a business cycle model where endogenous firm creation stems from two credit market frictions. First, entrepreneurs search for a lending relationship with a bank. Second, an optimal debt contract with monitoring is implemented. We analyze the interplay between both frictions, and embed it into an otherwise standard business cycle model which we estimate with Bayesian techniques. We find that uncertainty shocks are a prime contributor to business cycle fluctuations in the US, not only for macro-financial aggregates but also for firm creation. Moreover, we point out that the credit search friction dampens the financial accelerator mechanism because default may imply the end of the lending relationship.
  • Brand, Thomas; Isoré, Marlène; Tripier, Fabien (2017)
    Bank of Finland Research Discussion Papers 34/2017
    Published in Journal of Economic Dynamics and Control 99 ; February ; 2019.
    We develop a business cycle model with gross flows of firm creation and destruction.The credit market is characterized by two frictions. First,entrepreneurs undergo a costly search for intermediate funding to create a firm. Second, upon a match, a costlystate-verification contract is set up. When defaults occurs, banks monitor firms, seize their assets, and a fraction of financial relationships are severed. The model is estimated using Bayesian methods for the U.S. economy. Among other shocks, uncertainty in productivity turns out to be a major contributor to both macro-financial aggregates and firm dynamics.