The transmission process from policy-controlled interest rates to bank lending rates deserves reconsideration owing to the implementation of the European Monetary Union (EMU) in 1999. Additional attention to the subject in Austria is due to several large banks which, in 2002, have been charged for not passing on interest rate decreases to their customers. I examine dynamic responses of commerci...

This study investigates the expectations hypothesis of term structure of interest rates in Taiwan’s money market by examining six short-term instruments during the period for which monthly data are available (from Jan. 1994 to Dec. 2005). The six instruments studied are 30-, 60-, 90-, 120-, 180-, and 365-day commercial papers, respectively. This study argues that the unsound government bond mar...

Author: Stephen D. Williamson1 Affiliations: Department of Economics, Washington University in St. Louis; Richmond Federal Reserve Bank; St. Louis Federal Reserve Bank Correspondence: Department of Economics, Washington University in St. Louis, Campus Box 1208, St. Louis, MO 63130; [email protected]; Phone 314-935-9283; Fax 314-935-4156 Abstract:A segmented markets model is constructed ...

The Federal Reserve implements monetary policy by making discrete adjustments to its target for the federal funds rate. Such adjustments are believed to have significant implications for other short-term interest rates, so considerable resources are expended on forecasting the timing and magnitude of the Fed’s next move. Many analysts, both inside and outside of the Federal Reserve System, look...

This paper provides a study of bond yield differentials among EU government bonds issued between 1993 and 2005 on the basis of a unique dataset of issue spreads in the US and DM (Euro) bond market. Interest differentials between bonds issued by EU countries and Germany or the USA contain risk premiums which increase with fiscal imbalances and depend negatively on the issuer's relative bond mark...

Since the late 1980s the Fed has implemented monetary policy by adjusting its target for the overnight federal funds rate. Money’s role in monetary policy has been tertiary, at best. Indeed, several influential economists suggest that money is irrelevant for monetary policy: Central banks effect economic activity and inflation by a) controlling a very shortterm nominal interest rate and b) by i...

People can get most of their needs broadly satisfied in two ways: by close communal ties and by dealings with people in the marketplace. These modes of relating-termed communal and market-often necessitate qualitatively different motives, behaviors, and mind-sets. We reasoned that activating market mode would produce behaviors consistent with it and impair behaviors consistent with communal mod...

We examine the Fisher market model when buyers, as well as sellers, have an intrinsic value for money. We show that when the buyers have oligopsonistic power they are highly incentivized to act strategically with their monetary reports, as their potential gains are unbounded. This is in contrast to the bounded gains that have been shown when agents strategically report utilities [5]. Our main f...