The purpose of this paper is study the effect of monetary policy on asset prices. We study the properties of a monetary model in which a real asset is valued for its rate of return and for its liquidity. We show that money is essential if and only if real assets are scarce, in the precise sense that their supply is not sufficient to satisfy the demand for liquidity. Our model generates a clear ...

Firm cash holdings increased substantially from 1980 to 2013. The overall distribution of firm cash holdings changed in the same period. We study the implications of these changes for monetary policy. We use Compustat data and a model with financial frictions that allows the calculation of the monetary policy effects according to the distribution of cash holdings. We find that the interest rate...

After the accession of the candidate countries to the European Union in 2004, the European Central Bank will need to pursue monetary policy in an enlarged euro zone. I empirically investigate the role of banks in monetary policy transmission in the accession countries. Banks are of major importance for the financing of firms and thus the adjustment of their lending in response to monetary polic...

For the first time, calorimetric studies performed at very low temperature highlighted the preliminary and required conditions for further aggregation/coacervation of peptides from elastin in solution through the structural water reorganization around the peptides. For this purpose, we firstly characterized by turbidimetry and differential scanning calorimetry the synthetic S4 fragment peptide ...

We present a simple model with income risk and borrowing constraints which yields a “discounted Euler equation.” This feature of the model mutes the extent to which news about far future real interest rates (i.e., forward guidance) affects current outcomes. We show that this simple model approximates the outcomes of a rich model with uninsurable income risk and borrowing constraints in response...

The postantibiotic effect (PAE) of imipenem against Escherichia coli was measured at a wide variety of drug concentrations and times of exposure. We observed that the area under the concentration-time curve of drug exposure (AUC), the product of time of exposure and concentration of drug, is a much better predictor of the duration of the PAE than either parameter alone. We also measured the PAE...

Emerging economies are often exposed to sudden shortages of international financial resources. Yet domestic agents do not seem to take preventive measures against these sudden stops. We highlight the central role played by the limited development of ex ante (insurance) and ex post (spot) domestic financial markets in generating this collective undervaluation of international resources. We study...

Empirical evidence presented in this paper shows that the predictability of inflation at long horizons varies considerably across countries. Both simple theory and empirical evidence suggest that the crucial factor is the extent to which systematic monetary policy succeeds in stabilising the incipient unit root in inflation. The mechanism by which it does this appears however to be complicated ...

The paper develops a model to study the optimal choice of the central bank haircut policy. In the presence of uncertainties regrading liquidity needs and asset prices, there is a trade-off between providing liquidity to constrained agents and controlling the abundance of liquidity in the economy. The choice of the haircut involves balancing impacts on the liquidity positions of agents with diff...

We compare optimal and simple interest-rate rules. Our model features optimizing agents, monopolistic competition in both product and labor markets, and one-period nominal contracts (for wages alone or for both wages and prices) signed before shocks are known. Exact solutions ensure that we obtain correct welfare rankings. Optimal rules maximize the unconditional expected utility of the represe...