The Stock Market Channel of Monetary Policy - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook The Stock Market Channel of Monetary Policy write by Mr.Ralph Chami. This book was released on 1999-02-01. The Stock Market Channel of Monetary Policy available in PDF, EPUB and Kindle. This paper argues that the stock market is an important channel of monetary policy. Monetary policy affects real economic activity because inflation levies a property tax on stocks in addition to an income tax on dividend payments. Inflation thus taxes stocks more heavily than it does bonds. Households alter their required rate of return as inflation changes, and firms adjust production in order to satisfy their shareholders’ demands. As the stock market channel grows in importance, the appropriate intermediate target for the central bank is the price level, with price stability being the ultimate goal.
The Stock Market Channel of Monetary Policy
The Stock Market Channel of Monetary Policy - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook The Stock Market Channel of Monetary Policy write by Ralph Chami. This book was released on 2006. The Stock Market Channel of Monetary Policy available in PDF, EPUB and Kindle. This paper argues that the stock market is an important channel of monetary policy. Monetary policy affects real economic activity because inflation levies a property tax on stocks in addition to an income tax on dividend payments. Inflation thus taxes stocks more heavily than it does bonds. Households alter their required rate of return as inflation changes, and firms adjust production in order to satisfy their shareholders` demands. As the stock market channel grows in importance, the appropriate intermediate target for the central bank is the price level, with price stability being the ultimate goal.
Identifying the Interdependence Between US Monetary Policy and the Stock Market
Identifying the Interdependence Between US Monetary Policy and the Stock Market - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Identifying the Interdependence Between US Monetary Policy and the Stock Market write by Hilde C. Bjørnland. This book was released on 2010. Identifying the Interdependence Between US Monetary Policy and the Stock Market available in PDF, EPUB and Kindle. We estimate the interdependence between US monetary policy and the S&P 500 using structural VAR methodology. A solution is proposed to the simultaneity problem of identifying monetary and stock price shocks by using a combination of short-run and long-run restrictions that maintains the qualitative properties of a monetary policy shock found in the established literature (CEE 1999). We find great interdependence between interest rate setting and stock prices. Stock prices immediately fall by 1.5 per cent due to a monetary policy shock that raises the federal funds rate by ten basis points. A stock price shock increasing stock prices by one per cent leads to an increase in the interest rate of five basis points. Stock price shocks are orthogonal to the information set in the VAR model and can be interpreted as non-fundamental shocks. We attribute a major part of the surge in stock prices at the end of the 1990s to these non-fundamental shocks.
Inflation Expectations
Inflation Expectations - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Inflation Expectations write by Peter J. N. Sinclair. This book was released on 2009-12-16. Inflation Expectations available in PDF, EPUB and Kindle. Inflation is regarded by the many as a menace that damages business and can only make life worse for households. Keeping it low depends critically on ensuring that firms and workers expect it to be low. So expectations of inflation are a key influence on national economic welfare. This collection pulls together a galaxy of world experts (including Roy Batchelor, Richard Curtin and Staffan Linden) on inflation expectations to debate different aspects of the issues involved. The main focus of the volume is on likely inflation developments. A number of factors have led practitioners and academic observers of monetary policy to place increasing emphasis recently on inflation expectations. One is the spread of inflation targeting, invented in New Zealand over 15 years ago, but now encompassing many important economies including Brazil, Canada, Israel and Great Britain. Even more significantly, the European Central Bank, the Bank of Japan and the United States Federal Bank are the leading members of another group of monetary institutions all considering or implementing moves in the same direction. A second is the large reduction in actual inflation that has been observed in most countries over the past decade or so. These considerations underscore the critical – and largely underrecognized - importance of inflation expectations. They emphasize the importance of the issues, and the great need for a volume that offers a clear, systematic treatment of them. This book, under the steely editorship of Peter Sinclair, should prove very important for policy makers and monetary economists alike.
Bank Leverage and Monetary Policy's Risk-Taking Channel
Bank Leverage and Monetary Policy's Risk-Taking Channel - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Bank Leverage and Monetary Policy's Risk-Taking Channel write by Mr.Giovanni Dell'Ariccia. This book was released on 2013-06-06. Bank Leverage and Monetary Policy's Risk-Taking Channel available in PDF, EPUB and Kindle. We present evidence of a risk-taking channel of monetary policy for the U.S. banking system. We use confidential data on the internal ratings of U.S. banks on loans to businesses over the period 1997 to 2011 from the Federal Reserve’s survey of terms of business lending. We find that ex-ante risk taking by banks (as measured by the risk rating of the bank’s loan portfolio) is negatively associated with increases in short-term policy interest rates. This relationship is less pronounced for banks with relatively low capital or during periods when banks’ capital erodes, such as episodes of financial and economic distress. These results contribute to the ongoing debate on the role of monetary policy in financial stability and suggest that monetary policy has a bearing on the riskiness of banks and financial stability more generally.
