Journal of Money, Credit and Banking

Behzad Diba · Olivier Loisel

Since 2008 the US economy has gone through two zero-lower-bound (ZLB) episodes (Dec 2008–Dec 2015 and Mar 2020–Mar 2022). Standard New Keynesian (NK) and monetarist models struggle with three broad …

Peter Bednarek · Valeriya Dinger · Alison Schultz · Natalja von Westernhagen

Can banks effectively monitor their peers under asymmetric information? Effective peer monitoring matters for functioning interbank markets and, by implication, financial markets and the transmission …

Philippe Bacchetta · Elena Perazzi

As central banks worldwide explore retail central bank digital currency (CBDC), the macroeconomic consequences depend heavily on how CBDC interacts with bank deposits. Prior work spans a wide range of …

Chadwick Curtis · Julio Garín · Robert Lester

The paper asks whether population aging flattens the Phillips curve through a previously unexplored channel — age-related differences in the elasticity of substitution across product varieties. …

Yang Han · Jun Ma

This paper proposes a shadow rate no-arbitrage dynamic term structure model (SDTSM) with drifting trends to estimate the long-run trend of the real interest rate using yield curve data from the U.S., …

Christiaan van der Kwaak · Sweder van Wijnbergen

Does fiscal stimulus still work when it is financed through a banking system that is undercapitalized and holds large quantities of risky domestic government bonds? This was a first-order policy …

Ryuichiro Izumi · Yang Li

Research question and motivation: Asset fire sales were a defining feature of the 2007-08 crisis, and post-crisis reforms (Basel III liquidity requirements, Money Market Mutual Fund reforms) were …

Hiona Balfoussia · Harris Dellas · Dimitris Papageorgiou

This paper studies a transmission channel from sovereign fiscal weakness to banking performance that the literature has largely overlooked: government-provided deposit insurance, rather than banks' …

Luís A.V. Catão · Jan Ditzen · Daniel Marcel te Kaat

The paper asks how far global factors drive the foreign-borrowing component of advanced-economy banks' non-core funding, and whether exchange rate flexibility (and macroprudential policy) can insulate …

Daan Opschoor · Dick van Dijk · Philip Hans Franses

Research question and motivation. Since the Great Recession, quantifying downside risks to economic activity (rather than only expected outcomes) has become central for policymakers and investors.

Can Xu · Andreas Steiner

Research question and motivation: The paper asks whether and why the type of employment — specifically public-sector employment — affects household saving rates in China. This matters because Chinese …

Gene Ambrocio

Macro-uncertainty is widely believed to depress activity, but existing measures are tied to financial markets, professional forecasters, or economic policy, while a key transmission channel runs …

Antoine L. Noël · Hongfei Sun

Noël and Sun build an information-based theory of capital structure designed to explain the diversity of observed firm financing behavior and the coexistence of distinct optimal financial contracts. …

Rafael Gerke · Sebastian Giesen · Daniel Kienzler

This paper revisits the "reversal puzzle" — the counterintuitive result, first documented by Carlstrom, Fuerst and Paustian (CFP, 2015), that in standard New Keynesian models the effect of forward …

Charles M. Kahn · David Marshall · Robert L. McDonald

This paper develops a theoretical model to explain why financial markets can suffer self-fulfilling liquidity crises and how a central bank acting as a "market-maker of last resort" (MMLR) can …

Cecilia Dassatti · Rodrigo Lluberas · Francesc Rodriguez-Tous

Research question and motivation. Banks reluctant to recognize losses on troubled borrowers engage in "loan evergreening"—rolling over or extending credit to delay loss recognition.

Álvaro Fernández-Gallardo · Iván Payá

There is now broad consensus that monetary authorities should hold a financial-stability mandate and that macroprudential policy should be part of it, yet evidence on the macroeconomic effectiveness …

Rodrigo Barbone Gonzalez · João Barata Ribeiro Blanco Barroso · Bernardus Ferdinandus Nazar Van Doornik

Reserve requirements (RRs) were largely abandoned as a monetary tool in advanced economies after inflation targeting, but emerging markets (EMs) — especially Brazil — kept using them countercyclically …

Hidehiko Matsumoto

Emerging economies have rapidly accumulated foreign-currency (mostly dollar) debt — the dollar share of 14 emerging economies' foreign debt rose from 75% in 2010 to 81% in 2018. Such debt is dangerous …

Richard Dennis · Oleg Kirsanov

Experimental and survey evidence robustly documents "present bias" — people are more impatient over the short run than the long run, producing preference reversals inconsistent with standard …

Michael Smolyansky · Gustavo Suarez

When the Federal Reserve unexpectedly tightens policy, do riskier assets fall relative to safer ones (the standard prediction), or do investors read tightening as a signal that fundamentals are …

Meltem Chadwick · Rennae Cherry · Jaqueson K. Galimberti

Inflation expectations measured from household surveys are central inputs to monetary policy, but roughly half of respondents to the RBNZ Household Inflation Expectations survey decline to answer the …

Takao Asano · Yusuke Osaki

How much to save is a central household financial decision, and uncertainty drives the "precautionary saving motive." The precautionary-saving literature has mostly studied one-dimensional …

Thorsten Beck · Peter Bednarek · Daniel te Kaat · Natalja von Westernhagen

The paper asks how exchange rate movements affect the real economy and what role the banking system's foreign-asset exposure plays in transmitting exchange rate shocks. The motivation is concrete: …

Jay Hyun · Ziho Park · Vladimir Smirnyagin

This paper documents a novel channel through which trade shocks propagate across industries: the internal networks of U.S. multisector firms (the working paper circulated as "Import Competition and …

Jasmina Hasanhodzic · Laurence J. Kotlikoff

Hasanhodzic and Kotlikoff ask a question prior work assumed away: how large is generational risk, and can pay-go Social Security actually mitigate it? Earlier studies (Diamond, Bohn, Krueger-Kubler, …

Agustín Bénétrix · Michael Curran

How does country-specific uncertainty explain variation in the cross-border funding of banks? Studying this link is practically relevant given rising reliance on international borrowing under …

Pasqualina Arca · Gianfranco Atzeni · Luca G. Deidda

Research question and motivation: Under U.S. Chapter 7 bankruptcy, an individual entrepreneur has most unsecured debt discharged and only her non-exempt assets liquidated, producing an "insurance …

Masami Imai · Michiru Sawada

Why do financial crises leave such deep and protracted economic wounds, with crisis-stricken economies failing to revert to pre-crisis growth trends even a decade later? Imai and Sawada test one …

Justine Guillochon

Research question and motivation: The paper asks whether and which television news topics shape French households' one-year-ahead macroeconomic expectations (inflation, unemployment, economic …

Marius Clemens · Stefan Gebauer · Tobias König

Research question and motivation: The first two pillars of the European Banking Union (single supervision and single resolution) are in place, but the third pillar — a European deposit insurance …

James Tobin

This 1969 paper by James Tobin, published in the inaugural issue of the Journal of Money, Credit and Banking, sets out a general-equilibrium framework for monetary analysis built around the capital …

Volha Audzei · Ivan Sutóris

Audzei and Sutóris ask whether inflation-targeting monetary policy affects households' incentives to invest in energy conservation, and whether the standard central bank response to energy price …

Dominik Boddin · Daniel Marcel te Kaat · Chang Ma · Alessandro Rebucci

This paper identifies and quantifies a housing portfolio channel of quantitative easing (QE) transmission that operates through household portfolio rebalancing toward second homes (as opposed to the …

John W. Keating · Logan J. Kelly · A. Lee Smith · Victor J. Valcarcel

This 2019 Journal of Money, Credit and Banking paper by John Keating, Logan Kelly, A. Lee Smith, and Victor Valcarcel asks whether replacing the federal funds rate with Divisia M4 (DM4) -- a …

Luca Benati

Building on the finding that the velocity of M1 is, to a close approximation, the permanent component of short-term nominal interest rates, this paper proposes estimating the natural rate of interest …

Allen N. Berger · Onesime Epouhe · Raluca A. Roman

This paper examines the effects of the Troubled Asset Relief Program (TARP) and the Paycheck Protection Program (PPP)—two government bailout programs during the Global Financial Crisis and the …

Paulo Maio

This paper derives a three-factor consumption model that adds news about long-run consumption growth and news about long-run consumption variance to the baseline Consumption CAPM, and tests it on a …

Sang Rae Kim

This paper studies when a bank is more effective as a supplier of privately produced money-like safe assets (repo, commercial paper), finding that a bank produces safer, more liquid assets when (1) …

David Rivero · Hugo Rodríguez Mendizábal

This paper demonstrates that the canonical efficiency result of Diamond and Dybvig (1983) — that banks using maturity transformation can decentralize the first-best risk-sharing allocation — breaks …

Greta Meggiorini · Fabio Milani

The Behavioral New Keynesian model fixes the forward guidance puzzle by making agents myopic: "cognitive discounting", in Gabaix's (2014, 2016, 2020) formulation, shrinks expectations of distant …

Kevin X.D. Huang · Qinglai Meng · Jianpo Xue

This paper overturns the longstanding consensus established by Schmitt-Grohé and Uribe (1997) that relying on capital income tax adjustments to balance the government budget immunizes the economy …

Federico Apicella · Andrea Fabiani

Using the November 2017 EU Emissions Trading System reform, which pushed permit prices from about 5 to 20 euros per tonne, and loan-level data from the Italian Credit Registry, this paper asks whether …

Hanfeng Chen · Maria Elena Filippin

The paper analyzes the implications of introducing a retail central bank digital currency (CBDC) that competes with commercial bank deposits for household liquidity, in a model where banks must post …

Benjamín García · Arsenios Skaperdas

This paper constructs a new measure of political pressure on the Federal Reserve from textual analysis of Fed Chairs' testimonies at Humphrey-Hawkins congressional hearings, and documents that the use …

Barbara Annicchiarico · Marco Carli · Francesca Diluiso

This paper embeds a carbon pricing sector into an extended DSGE model with a financial accelerator (E-DSGE) featuring heterogeneous firms, bank monitoring, and a borrowing-constraint amplification …

Stig V. Møller · Thomas Q. Pedersen · Sigurd A. M. Steffensen · Martin M. Andreasen

Using the Livingston survey - the longest-running U.S. survey of professional economists, running twice a year since June 1952 - this paper shows that the expected excess stock return implied by these …

Stefania D'Amico · Iryna Kaminska

Using security-level data on individual corporate bond prices and the Bank of England's published purchase quantities across its gilt purchase programs (QE1: £200bn, QE2: £125bn, QE3: £50bn, QE4: …

Fabian Gogolin · Ivan Lim · Francesco Vallascas

This paper studies what happens to local banking markets when a small bank suffers a successful cyberattack, using a stacked difference-in-differences design on 16 cyber incidents at small U.S. banks …

Gu Jin · Tao Zhu

This paper applies a multiple-denomination commodity money model — building on Lee, Wallace, and Zhu (2005) — to coinage episodes in late medieval England, and derives two main findings. Shortages of …

Lee K. Davison · Carlos D. Ramirez

Does deposit insurance promote financial depth by arresting the outflow of deposits from the banking system during periods of bank distress? The paper tests and quantifies the deposit-stabilizing …

Christoph Wegener · Robinson Kruse-Becher · Tony Klein

This paper tests whether the sharp rise in EU Emissions Trading System (EU ETS) allowance prices from 2018 onward was driven by a rational bubble. The methodological contribution is to modify the Fama …

Christopher A. Sims

Applying the fiscal theory of the price level's corporate-finance analogy -- fiat (own-currency) government debt behaves like equity, while dollar-denominated or indexed debt behaves like conventional …

Antoine Camous

The conventional division of labour holds that central banks should not target distribution and that fiscal policy, with its targeted instruments, should handle the redistributive consequences of …

Michael Woodford

Woodford argues that commitment to a sound monetary policy rule, such as a Taylor rule, cannot by itself guarantee price stability, because Ricardian equivalence fails to make fiscal policy irrelevant …

Emanuele Ciola · Gabriele Tedeschi

This paper investigates how the endogenous structure of credit, deposit, and interbank networks shapes business cycle fluctuations and large financial crises in the U.S. economy.

Markus Hertrich · Daniel Nathan

This paper uses confidential daily data on the Bank of Israel's (BOI) foreign exchange purchase program in the USD/Israeli new shekel (ILS) spot market from 2013 to 2019 to study how FX interventions …

Emmanuel De Veirman · Jasper De Jong

De Veirman and de Jong develop a new approach to estimating the macroeconomic effects of changes in regulatory loan-to-value (LTV) limits on mortgage loans. The central questions are: (1) how do …

Kristian S. Blickle · Sarah N. Hamerling · Donald P. Morgan

Using FEMA disaster declarations matched to SHELDUS property-damage estimates and Call Report data for 1995–2018, this paper finds that weather disasters — even at their most severe — have had modest …

Rodney J. Garratt · Zhentong Lu · Phoebe Tian

This paper uses detailed transaction-level data from Canada's new high-value payment system (HVPS) to show how participants save liquidity by strategically exploiting the gridlock resolution …

Carlos Arteta · Steven Kamin · Franz U. Ruch

This paper examines how the effects of rising U.S. interest rates on emerging market and developing economies (EMDEs) depend on the underlying source of the interest rate increase. Specifically, it …

Guillermo A. Calvo · Andrés Velasco

Calvo and Velasco study an economy where both money and government bonds provide liquidity services, and they show that this shared role implies bond-financed fiscal expansions can be neutral or …

Alessia De Stefani · Rui C. Mano

This paper uses instrumental-variable local projections (IV-LP) on an unbalanced panel of up to 35 countries over approximately two decades to establish two interconnected findings about fixed-rate …

Kozo Ueda

This paper asks whether heterogeneity in the marginal propensity to consume (MPC) stems from temporary circumstances (e.g., transient wealth shocks that tighten liquidity) or persistent personal …

Mirko Abbritti · Sebastian Weber

This paper develops a two-country currency union DSGE model with endogenous TFP growth and product and labor market frictions to assess how cross-country differences in market regulation affect …

Robert E. Lucas

This 1980 paper by Robert Lucas argues that economic theories should be understood as explicit instructions for building fully articulated, artificial "analogue" economies, and traces business cycle …

Julio L. Ortiz

Analyzing panel data from the U.S. Survey of Professional Forecasters (SPF, 1992Q1–2019Q4, 77 forecasters, 1,520 forecaster-quarter observations), Julio Ortiz finds that a "misspecified expectations" …

Maximilian Schröder

This paper introduces a Bayesian Gaussian mixture density regression framework that estimates the complete forecast distribution of inflation — not just selected quantiles — and decomposes the entire …

George J. Bratsiotis · Kasun D. Pathirage

This paper introduces a four-agent estimated New Keynesian DSGE model—comprising banked simple households, underbanked simple households, firm owners, and bank owners—to examine agent-specific and …

Sandra Daudignon · Oreste Tristani

This paper analyzes how monetary policy should respond to a long-run natural interest rate that can drift permanently — following a bounded random walk with upper bound 3 percent and lower bound 0 …

Athanasios Orphanides

Re-estimating the Clarida-Galí-Gertler forward-looking Fed policy rule using only the real-time Greenbook forecasts available to the FOMC at the time, rather than revised after-the-fact data, this …

Michael T. Kiley

This paper examines optimal monetary policy under discretion when the loss function is asymmetric — placing greater weight on employment shortfalls than on equivalently sized employment strength. The …

Sebastian Schmidt

The paper builds a discrete-time DSGE model with Calvo sticky prices in which the public sector has two feedback rules that can hit corners, generating endogenous shifts between an "orthodox" regime …

Apostolos Serletis · Libo Xu

Measuring the welfare cost of inflation requires specifying a money demand function, a definition of money, and an approach to consumer surplus; existing estimates vary widely because these choices …

Chenyu Shan · Dragon Yongjun Tang · Wenya Wang

Third-party loan guarantees—in which a fee-charging guarantor formally guarantees a bank loan and conducts its own due diligence on the borrower—are present in approximately 10% of Chinese bank loans …

Jens H. E. Christensen · Simon T. Hetland

The paper introduces the concept of "passive quantitative easing" (passive QE): a deliberate reduction in government debt issuance that lowers anticipated future bond supply and reduces long-term …

Yuteng Cheng · Ryuichiro Izumi

This paper examines how the degree of user anonymity built into a central bank digital currency (CBDC) affects bank lending decisions and what this implies for the optimal design of CBDC anonymity. …

Richard Dennis · Tatiana Kirsanova

Dennis and Kirsanova ask whether shocks to labor-market matching efficiency and worker bargaining power pose a significant problem for monetary policy, and whether the inability to commit (discretion …

Kazuo Mino · Hiroaki Sasaki

This paper asks how population aging changes the distribution of income and wealth, using a continuous-time overlapping-generations model in which persistent growth in per capita income is sustained …

Wenxin Du · Kristin Forbes · Matthew Luzzetti

Drawing on the recent experience of seven advanced-economy central banks, this paper offers the first cross-country assessment of quantitative tightening (QT) — the unwinding of bond holdings …

Markus Haavio · Joni Heikkinen · Pirkka Jalasjoki · Juha Kilponen · Maritta Paloviita · Ilona Vänni

This paper estimates the European Central Bank's loss function directly rather than inferring it from a reaction function, using the tone of the Governing Council's press conference introductory …

Olivier Blanchard · Jordi Galí

The standard New Keynesian model implies that stabilising inflation also stabilises the welfare-relevant output gap -- a property the authors name the "divine coincidence" and trace to the absence of …

Hubert János Kiss · Alfonso Rosa García · Lukas Voellmy

This paper uses laboratory experiments to evaluate the effectiveness of two liquidity management tools — redemption fees and redemption gates — in reducing runs on money market funds (MMFs), …

Ojasvita Bahl · Chetan Ghate · Debdulal Mallick

Governments in emerging market and developing economies (EMDEs) routinely intervene in agricultural markets — procuring grain and redistributing it to poor households — in response to food price …

José E. Gutiérrez

This paper provides a contract-theoretic rationale for the special liquidity regulation of bank credit lines—a form of lending that has received little attention in the regulatory literature despite …

Anna Grodecka-Messi · Jieying Li · Xin Zhang

This paper investigates how rising house prices affect the composition of household debt portfolios in Sweden during 2010–2014. Specifically, the authors ask whether homeowners who experience housing …

Masazumi Hattori · Tomohide Mineyama · Jouchi Nakajima

The paper addresses a fundamental limitation of the standard Taylor rule as a monetary policy stance gauge: the rule is defined solely for the overnight federal funds rate (FFR) and cannot assess …

George S. Tavlas

This paper sets Milton Friedman's 1953 essay "The Case for Flexible Exchange Rates" side by side with Harry Johnson's near-identically titled 1969 essay, argument by argument, and concludes that …

Bruno Cavani · Samer F. Shousha

Textbook Mundell–Fleming logic says a weaker local currency should be expansionary through net exports, yet in emerging market economies (EMEs) a stronger US dollar has been consistently associated …

Panagiotis Avramidis · George G. Pennacchi

Using 2001-2022 annual data on U.S. commercial and savings banks matched with county-level demographic data, this paper shows that banks operating in areas with older populations—measured by the …

Kim Ceulemans · Sarfraz Khan · John K. Wald

Two literatures predict opposite things about what happens to a country's pollution when it opens its equity market to foreign investors. Foreign institutional investors have been shown to push firms …

Ivan Lim · Jens Hagendorff · Seth Armitage

Using closures of U.S. bank regulatory offices between 2002 and 2013 as difference-in-differences shocks to the physical proximity between supervisors and the community banks they oversee, the paper …

Marianna Blix Grimaldi · Alberto Crosta · Dong Zhang

This paper uses transaction-level bond data under MiFID I and II to measure five dimensions of Swedish government bond market liquidity during the Riksbank's QE program (2015–2020) and identifies two …

Vadym Lepetyuk · Lilia Maliar · Serguei Maliar · John B. Taylor

When a central bank announces a policy it will not implement for some time, households and firms respond straight away. This paper measures how much of a policy's effect arrives in that anticipation …

Selva Demiralp · Òscar Jordà

Demiralp and Jorda argue that since the Fed began publicly announcing its Federal funds rate target in 1994, it has manipulated short-term rates through a Pavlovian "announcement effect" -- moral …

Veasna Kheng · Lei Pan · Xiaodong Fan

This paper builds and estimates a small open economy real-business-cycle (SOE-RBC) model for Cambodia augmented with two non-standard external-sector shocks — net unilateral transfers (remittances and …

Mamoon Kader · Hashmat Khan · Minjoon Lee · Raúl Razo-García

This paper uses an open-economy heterogeneous-household model with incomplete markets to evaluate the welfare and distributional consequences of the U.S. Tax Cuts and Jobs Act (TCJA) of 2017 — which …

David Bügel · Albert Hidalgo · Ralph Luetticke

Asking whether unconventional monetary policy works differently from an interest-rate cut has been hard to answer because the two kinds of policy have been measured with different tools, so any …

Yuliyan Mitkov · Ulrich Schüwer

This paper documents that U.S. metropolitan statistical areas with higher income inequality have a larger share of failed banks, higher average bank default probabilities, and greater dispersion of …