NBER WORKING PAPER MARKETS AND PLANNING
... the optimal policy instruments (i.e. to increase the magnitude of the borrowing taxes and subsidies). Increasing the relative importance of open activities can be viewed as a way to reduce the harmful consequences of overdiscounting. Overdiscounting may rationalize various conditionality clauses tha ...
... the optimal policy instruments (i.e. to increase the magnitude of the borrowing taxes and subsidies). Increasing the relative importance of open activities can be viewed as a way to reduce the harmful consequences of overdiscounting. Overdiscounting may rationalize various conditionality clauses tha ...
Investing in corporate bonds?
... about these offers through newspaper advertisements. The prospectus for an offer of corporate bonds generally specifies a minimum investment parcel (or bundle of bonds). People who invest in corporate bonds when they are first issued pay the face value of the bond (usually $100 each). If you buy cor ...
... about these offers through newspaper advertisements. The prospectus for an offer of corporate bonds generally specifies a minimum investment parcel (or bundle of bonds). People who invest in corporate bonds when they are first issued pay the face value of the bond (usually $100 each). If you buy cor ...
The Liquidity Premium of Near-Money Assets
... In the model of Greenwood, Hanson, and Stein (2014) an expansion in T-bill supply reduces household’s marginal benefit of liquidity, which lowers the liquidity premium and reduces the incentive of the private sector to produce money-like short-term debt. In my model, the central bank would want to ...
... In the model of Greenwood, Hanson, and Stein (2014) an expansion in T-bill supply reduces household’s marginal benefit of liquidity, which lowers the liquidity premium and reduces the incentive of the private sector to produce money-like short-term debt. In my model, the central bank would want to ...
Investing for the Future
... -The chance that inflation will rise faster than the return on your investment. -Government interferences EX. Taxes, regulations ...
... -The chance that inflation will rise faster than the return on your investment. -Government interferences EX. Taxes, regulations ...
Inflation: The Influence of Inflation on Equity Returns
... at risk for declining margins. Clearly, the term “inflation hedge” is undeserved for many companies. Inflation can also create headwinds for equity as an asset class. Higher inflation expectations increase interest rates which in turn increase the yields on bonds. When an investor buys stocks, they ...
... at risk for declining margins. Clearly, the term “inflation hedge” is undeserved for many companies. Inflation can also create headwinds for equity as an asset class. Higher inflation expectations increase interest rates which in turn increase the yields on bonds. When an investor buys stocks, they ...
JIA 105 (1978) 15-26 - Institute and Faculty of Actuaries
... 1.3. The yield calculated for a 20-year British government stock was derived from a weighted average of the mean gross redemption yields of three pairs of stocks, each pair selected from consecutive five-year periods. The price index was derived from the yield by entering bond tables. 1.4. The deben ...
... 1.3. The yield calculated for a 20-year British government stock was derived from a weighted average of the mean gross redemption yields of three pairs of stocks, each pair selected from consecutive five-year periods. The price index was derived from the yield by entering bond tables. 1.4. The deben ...
Endogenous Interest rate Wedge and Productivity Growth in an
... high productivity growth rate subsidy saving. Moreover, the wedge is decreasing on level of financial development and on the income per capita. The saving wedge is one type of financial friction that creates the gap between the rental rate of capital for domestic firms (which equals to world interes ...
... high productivity growth rate subsidy saving. Moreover, the wedge is decreasing on level of financial development and on the income per capita. The saving wedge is one type of financial friction that creates the gap between the rental rate of capital for domestic firms (which equals to world interes ...
Has Forward Guidance Been Effective?
... to meet the higher demand. When the federal funds rate is fixed at its effective lower bound, however, reductions in the target overnight interest rate can no longer be used to generate this economic stimulus. Forward guidance is thought to operate through a similar interest rate channel but doesn’t ...
... to meet the higher demand. When the federal funds rate is fixed at its effective lower bound, however, reductions in the target overnight interest rate can no longer be used to generate this economic stimulus. Forward guidance is thought to operate through a similar interest rate channel but doesn’t ...
What Else Can Central Banks Do? - Economics
... The Geneva Reports on the World Economy are published annually by CEPR and ICMB and have been providing innovative analysis on important topical issues facing the global economy since 1999. This 18th report focuses on what central banks can do to stimulate economies when interest rates have reached ...
... The Geneva Reports on the World Economy are published annually by CEPR and ICMB and have been providing innovative analysis on important topical issues facing the global economy since 1999. This 18th report focuses on what central banks can do to stimulate economies when interest rates have reached ...
Discounting Pension Liabilities: Funding versus Value
... that intends to make good on the future benefit payments. For example, a number of defined benefit (DB) plans including General Motors have recently transferred their currently-accrued pension liabilities to an insurance company (Prudential, in the GM case) that will then provide retirement annuitie ...
... that intends to make good on the future benefit payments. For example, a number of defined benefit (DB) plans including General Motors have recently transferred their currently-accrued pension liabilities to an insurance company (Prudential, in the GM case) that will then provide retirement annuitie ...
Titan Europe 2007-2 Limited Quarterly Surveillance Report for the
... With respect to documents that have been issued as a RIS Notice, such documents have been issued by the issuer of the notes and have not necessarily been prepared by the Servicer. Deal Summary, CMSA and Asset Surveillance reports will not generally be issued as RIS Notices. This document is provided ...
... With respect to documents that have been issued as a RIS Notice, such documents have been issued by the issuer of the notes and have not necessarily been prepared by the Servicer. Deal Summary, CMSA and Asset Surveillance reports will not generally be issued as RIS Notices. This document is provided ...
The Democratization of Credit and the Rise in Consumer Bankruptcies
... for their empirical findings. By lowering barriers to interstate banking, deregulation expands market size, effectively lowering the fixed cost of contracts. In our framework, this leads to the extension of credit to riskier borrowers, resulting in more bankruptcies. Our framework also offers new i ...
... for their empirical findings. By lowering barriers to interstate banking, deregulation expands market size, effectively lowering the fixed cost of contracts. In our framework, this leads to the extension of credit to riskier borrowers, resulting in more bankruptcies. Our framework also offers new i ...
Perspectives on Global Real Interest Rates
... United Kingdom are shown in Figure 3.2. The modeland survey-based approaches give very similar estimates. The figure suggests that real rates in the two countries have declined sharply since the early 1980s. Moreover, the rate decline has been global (Figure 3.3). The average global ten-year real ra ...
... United Kingdom are shown in Figure 3.2. The modeland survey-based approaches give very similar estimates. The figure suggests that real rates in the two countries have declined sharply since the early 1980s. Moreover, the rate decline has been global (Figure 3.3). The average global ten-year real ra ...
Term Structure of Interest Rates
... accepting an expected return from the risky investment that is less than the risk-free rate. Even though there are some investors who are risk loving, a risk loving market is an aberration, with the exceptions being casinos, sports gambling markets, lotteries, and ...
... accepting an expected return from the risky investment that is less than the risk-free rate. Even though there are some investors who are risk loving, a risk loving market is an aberration, with the exceptions being casinos, sports gambling markets, lotteries, and ...
Efficient policy rule for Inflation Targeting in Colombia
... targets. In the early nineties central bankers of many countries like New Zealand, Canada, the United Kingdom, among others, adopted the inflation targeting strategy as one of the means to control inflation. In recent years, many other countries such as Colombia and Chile have also adopted the infla ...
... targets. In the early nineties central bankers of many countries like New Zealand, Canada, the United Kingdom, among others, adopted the inflation targeting strategy as one of the means to control inflation. In recent years, many other countries such as Colombia and Chile have also adopted the infla ...
Non-Owner-Occupancy Misrepresentation and Loan Default
... Balance Mismatch Placebo Table The table presents OLS estimates from regressions in which the dependent variable takes the value of one if the loan defaults (90+ days delinquent) in the first two years since origination and zero otherwise. Balance Mismatch takes a value of one if the origination loa ...
... Balance Mismatch Placebo Table The table presents OLS estimates from regressions in which the dependent variable takes the value of one if the loan defaults (90+ days delinquent) in the first two years since origination and zero otherwise. Balance Mismatch takes a value of one if the origination loa ...
Chapter 12 Overlapping generations in continuous time
... paid continuously until death, where is the risk-free interest rate and ̂ is an actuarial compensation over and above the risk-free interest rate. How is the actuarial compensation determined in equilibrium? Well, since the economy is large, the insurance companies face no aggregate uncertainty. ...
... paid continuously until death, where is the risk-free interest rate and ̂ is an actuarial compensation over and above the risk-free interest rate. How is the actuarial compensation determined in equilibrium? Well, since the economy is large, the insurance companies face no aggregate uncertainty. ...
Inflation Report
... The interest rate outlook is important for households and enterprises when they make financial decisions, and hence for developments in inflation, output and employment. Our formulations concerning the key rate over the next four months may provide some guidance. In the report, we also present a mor ...
... The interest rate outlook is important for households and enterprises when they make financial decisions, and hence for developments in inflation, output and employment. Our formulations concerning the key rate over the next four months may provide some guidance. In the report, we also present a mor ...
Lecture 3b Ch 11 Mortgage Markets
... protect the lender from financial loss. • PMI: insurance against default by the borrower • Qualifications: includes credit history, employment history, etc., to determine the borrowers ability to repay the mortgage as specified in the contact ACF 104 Financial Institutions ...
... protect the lender from financial loss. • PMI: insurance against default by the borrower • Qualifications: includes credit history, employment history, etc., to determine the borrowers ability to repay the mortgage as specified in the contact ACF 104 Financial Institutions ...
China`s new monetary policy framework
... As the two schools debated on rational expectations, sticky price and monetary nonneutrality, the framework for modern monetary policy was born. Generally, central bankers now believe in affecting the real economy through monetary adjustments, and maintaining steady price levels, given the huge cost ...
... As the two schools debated on rational expectations, sticky price and monetary nonneutrality, the framework for modern monetary policy was born. Generally, central bankers now believe in affecting the real economy through monetary adjustments, and maintaining steady price levels, given the huge cost ...
Equity Returns and Business Cycles in Small Open Economies Mohammad R. Jahan-Parvar
... Campbell and Cochrane (1999) explained equity premia by linking asset prices to deviations of consumption from an external habit. The mechanism is as follows. In comparison to CRRA utility, as consumption reverts towards habit in business cycle troughs, the curvature of the habit formation utility f ...
... Campbell and Cochrane (1999) explained equity premia by linking asset prices to deviations of consumption from an external habit. The mechanism is as follows. In comparison to CRRA utility, as consumption reverts towards habit in business cycle troughs, the curvature of the habit formation utility f ...
Interest
Interest is money paid by a borrower to a lender for a credit or a similar liability. Important examples are bond yields, interest paid for bank loans, and returns on savings. Interest differs from profit in that it is paid to a lender, whereas profit is paid to an owner. In economics, the various forms of credit are also referred to as loanable funds.When money is borrowed, interest is typically calculated as a percentage of the principal, the amount owed to the lender. The percentage of the principal that is paid over a certain period of time (typically a year) is called the interest rate. Interest rates are market prices which are determined by supply and demand. They are generally positive because loanable funds are scarce.Interest is often compounded, which means that interest is earned on prior interest in addition to the principal. The total amount of debt grows exponentially, and its mathematical study led to the discovery of the number e. In practice, interest is most often calculated on a daily, monthly, or yearly basis, and its impact is influenced greatly by its compounding rate.