Open market operation ≈ Open market operation
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Monetary Policy Communications and Their Effects on Household Inflation Expectations Open
We study how different forms of communication influence inflation expectations in a randomized controlled trial using nearly 20,000 US individuals. We elicit individuals’ inflation expectations and then provide eight different forms of inf…
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Bank Liquidity Risk and Performance Open
This study employs an alternative measure of liquidity risk to investigate its determinants by using an unbalanced panel dataset of commercial banks in 12 advanced economies over the period 1994–2006. Dependence on liquid assets for extern…
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Liquidity Restrictions, Runs, and Central Bank Interventions: Evidence from Money Market Funds Open
Liquidity restrictions on investors, like the redemption gates and liquidity fees introduced in the 2016 money market fund (MMF) reform, are meant to improve financial stability. However, we find evidence that such liquidity restrictions e…
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One Central Bank to Rule Them All Open
While global stock markets enjoy high returns on days surrounding Federal Open Market Committee (FOMC) meetings, there is no comparable result for other central banks either internationally or, more surprisingly, domestically. Neither anno…
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Risk Appetite and the Risk-Taking Channel of Monetary Policy Open
Monetary policy affects financial markets and the broader economy in part by changing the risk appetite of investors. This article provides new evidence for this so-called risk-taking channel of monetary policy by revisiting and extending …
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The Voice of Monetary Policy Open
We develop a deep learning model to detect emotions embedded in press conferences after the Federal Open Market Committee meetings and examine the influence of the detected emotions on financial markets. We find that, after controlling for…
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The Federal Reserve System : Purposes and Functions Open
The 10th edition of The Federal Reserve System Purposes & Functions details the structure, responsibilities, and aims of the U.S. central banking system. The Federal Reserve System performs five functions to promote the effective operation…
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Policy Language and Information Effects in the Early Days of Federal Reserve Forward Guidance Open
I show that the nature of the Federal Open Market Committee’s (FOMC’s) forward guidance language shapes the private sector’s responses to monetary policy statements. From February 2000 to June 2003, the FOMC only gave forward guidance abou…
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Shadow money and the public money supply: the impact of the 2007–2009 financial crisis on the monetary system Open
This article explores the effects of the political reactions to the 2007–2009 financial crisis on the monetary system. It chimes in with the view that shadow banks create ‘shadow money’, i.e. private substitutes for bank deposits. The arti…
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Predicting Fed Forecasts Open
Monetary policy decisions by the Fed#x27;s Federal Open Market Committee (FOMC) have attracted considerable attention in recent years, especially with quantitative easing through large-scale asset purchases, the introduction of forward gui…
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Open Access for Rail Passenger Services in Europe: Lesson Learnt from Forerunner Countries Open
The fourth railway package –still discussed today by the European institutions - plans to open the whole rail transport market to competition in 2022. Currently, only freight transportation and international passenger services are open to …
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Bank Lending in Times of Large Bank Reserves Open
Reserves held by the U.S. banking system rose from under $50 billion before 2008 to $2.8 trillion by 2014. Some economists argue that such a large quantity of reserves could lead to overly expansive bank lending as the economy recovers, re…
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Does Quantitative Easing Affect Market Liquidity? Open
We argue that central bank large-scale asset purchases—commonly known as quantitative easing (QE)—can reduce priced frictions to trading through a liquidity channel that operates by temporarily increasing the bargaining power of sellers in…
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The impact of the liquidity coverage ratio on money creation: A stock-flow based dynamic approach Open
This paper examines money creation process of the banking system when it is complying with the Liquidity Coverage Ratio (LCR). A stock-flow based dynamic model of credit creation process is developed in which the commercial bank supplies l…
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How Much Information Do Monetary Policy Committees Disclose? Evidence from the FOMC's Minutes and Transcripts Open
The purpose of central bank minutes is to give an account of monetary policy meeting discussions to outside observers, thereby enabling them to draw informed conclusions about future policy. However, minutes are by necessity a shortened an…
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Payments, Credit and Asset Prices Open
This paper studies a monetary economy with two layers of transactions. In enduser transactions, households and institutional investors pay for goods and securities with pay-ment instruments provided by banks. Endusers ’ payment instruction…
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A Lesson from the Great Depression that the Fed Might have Learned: A Comparison of the 1932 Open Market Purchases with Quantitative Easing Open
We examine the first QE program through the lens of an open-market operation under taken by the Federal Reserve in 1932, at the height of the Great Depression.This program entailed large purchases of medium-and long-term securities over a …
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Why the Federal Reserve Failed to See the Financial Crisis of 2008: The Role of "Macroeconomics" as Sense-Making and Cultural Frame Open
One of the puzzles about the financial crisis of 2008 is why the regulators were so slow to recognize the impending collapse of the financial system. In his talk, Neil Fligstein proposes a novel account of what happened. On the basis of an…
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Liquidity risk and bank performance in Southeast Asian countries: a dynamic panel approach Open
This study uses unbalanced panel data from Bankscope from 171 banks in 9 countries in Southeast Asia over the period 2004–2016 and the Generalized Method of Moments (SGMM) to analyze the impact of liquidity risk on bank performance in Sout…
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Perceived FOMC: The making of hawks, doves and swingers Open
An important and open question in monetary economics is how the Federal Reserve makes its policy decisions. We document that when an FOMC member was born, his/her educational background and the Committee's changing hawk-dove composition ha…
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Safe Assets, Liquidity, and Monetary Policy Open
This paper studies monetary policy in models where multiple assets have different liquidity properties: safe and “pseudo-safe” assets coexist. A shock worsening the liquidity properties of the pseudo-safe assets raises interest rate spread…
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Money Creation in Fiat and Digital Currency Systems Open
To support the understanding that banks’ debt issuance means money creation, while centralized nonbank financial institutions’ and decentralized bond market intermediary lending does not, the paper aims to convey two related points: First,…
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Non-Neutrality of Open Market Operations Open
We analyze the effects on inflation and output of unconventional open-market operations due to the possible income losses on the central bank's balance sheet. We first state a general Neutrality Property, and characterize the theoretical c…
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Government Intervention and Strategic Trading in the U.S. Treasury Market Open
We study the impact of permanent open market operations (POMOs) by the Federal Reserve on U.S. Treasury market liquidity. Using a parsimonious model of speculative trading, we conjecture that i) this form of government intervention improve…
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Digital currency of the central bank as the third form of money of the state Open
Objective: to consider the digital currency of Central Banks as the third form of money of a state; to identify advantages and disadvantages of this new form of money; to clarify the classification of digital currency of the Central Bank; …
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Is there a limit on FOMC dissents? Evidence from the Greenspan era Open
Dissents in the Federal Open Market Committee (FOMC) are relatively rare. Is this because policymakers late in the voting order are deterred from dissenting? Dissents became infrequent during Chairman Greenspan's tenure, arguably rejecting…
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Monetary policy during the wartime: How to ensure macroeconomic stability Open
In peacetime, the main contribution of monetary policy to macroeconomic stability is to ensure the stability of price dynamics through regulating money supply. During the war, the market principles of the economy and the formation of its p…
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Alternative Strategies: How Do They Work? How Might They Help? Open
Several structural developments in the U.S. economy—including lower neutral interest rates and a flatter Phillips curve—have challenged the ability of the current monetary policy framework to deliver on the Federal Open Market Committee’s …
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Banking, Money and Credit: A Systemic Perspective Open
Contemporaneous banking theories appear to understand financial institutions as intermediaries, relegating bank money creation through money multiplication outside the core of banking activity. This article takes a different systemic persp…
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Monetary Policy and Bank Liquidity Creation: Does Bank Size Matter? Open
This paper investigates the effect of monetary policy on liquidity creation of commercial banks and if the effect is conditional on bank size. The paper uses a dataset covering 23 Vietnamese commercial banks during the period 2007–2017 col…