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... with gold or gold-backed securities.17 Today they are settled annually with interest-bearing, marketable as sets, shares in the so-called SOMA portfolio resulting from money creation via open-market operations.18 In the eurozone, in contrast, Target credit slumbers on the balance sheets of the cent ...
... with gold or gold-backed securities.17 Today they are settled annually with interest-bearing, marketable as sets, shares in the so-called SOMA portfolio resulting from money creation via open-market operations.18 In the eurozone, in contrast, Target credit slumbers on the balance sheets of the cent ...
Interest Rates and Bond Valuation
... As time passes, interest rates change in the marketplace. The cash flows from a bond, however, stay the same because the coupon rate and maturity date are specified when it is issued. As a result, the value of the bond fluctuates. When interest rates rise, the present value of the bond’s remaining c ...
... As time passes, interest rates change in the marketplace. The cash flows from a bond, however, stay the same because the coupon rate and maturity date are specified when it is issued. As a result, the value of the bond fluctuates. When interest rates rise, the present value of the bond’s remaining c ...
A Critical Comparison of cash- and asset-based Microcredit
... In order to demonstrate the advantages of this approach we must first address two important questions; firstly, have traditional microcredit markets been able to overcome inherent imperfections to provide efficient credit services to the poor, secondly, does access to credit lead to significant pove ...
... In order to demonstrate the advantages of this approach we must first address two important questions; firstly, have traditional microcredit markets been able to overcome inherent imperfections to provide efficient credit services to the poor, secondly, does access to credit lead to significant pove ...
NBER WORKING PAPER SERIES STOCK AND BOND RETURNS WITH MOODY INVESTORS
... alluded to above, we test how well the model fares with respect to these puzzles. Our model generates a bond-stock return correlation that is somewhat too high relative to the data but it matches the predictability evidence. Third, to convert from model output to the data, we use inflation as a stat ...
... alluded to above, we test how well the model fares with respect to these puzzles. Our model generates a bond-stock return correlation that is somewhat too high relative to the data but it matches the predictability evidence. Third, to convert from model output to the data, we use inflation as a stat ...
Investment Analysis and Portfolio Management
... A. So long as a return series has any variability, the geometric mean return must be less than the arithmetic mean return. In the solution to Problem 2, we computed the geometric mean annual return as 6.7 percent. In general, the difference between the geometric and arithmetic means increases with t ...
... A. So long as a return series has any variability, the geometric mean return must be less than the arithmetic mean return. In the solution to Problem 2, we computed the geometric mean annual return as 6.7 percent. In general, the difference between the geometric and arithmetic means increases with t ...
The volatility of banks in the financial crisis
... showed that this was in fact true during the period 1834-1987. During recessions and financial crises, the economy is depreciating. This depreciation starts because of higher uncertainty in markets. Gorton (1987)v in fact showed that bank failures and financial crises are associated with greater ris ...
... showed that this was in fact true during the period 1834-1987. During recessions and financial crises, the economy is depreciating. This depreciation starts because of higher uncertainty in markets. Gorton (1987)v in fact showed that bank failures and financial crises are associated with greater ris ...
A Detailed Look into Peer to Peer Lending
... the car loan borrowers are mostly high quality and low risk of default. The most recent versions of FICO have been proven to be validated against economic cycle risk11. All told, this is a robust measure of riskiness that has been vetted by the financial industry for decades and is a continued commo ...
... the car loan borrowers are mostly high quality and low risk of default. The most recent versions of FICO have been proven to be validated against economic cycle risk11. All told, this is a robust measure of riskiness that has been vetted by the financial industry for decades and is a continued commo ...
International Dimensions Of Monetary And Fiscal Policy
... If other nations are to take the needs of Canadian economy into account, Canada must take the needs of other countries into account in determining its goals. ...
... If other nations are to take the needs of Canadian economy into account, Canada must take the needs of other countries into account in determining its goals. ...
The equity premium
... risk free assets? One intuitive answer is that stocks are "riskier" than bonds and investors require a premium for bearing this additional risk. Indeed, the standard deviation of the returns to stocks (about 20 percent a year historically) is larger than that of the returns to T-bills (about 4 perce ...
... risk free assets? One intuitive answer is that stocks are "riskier" than bonds and investors require a premium for bearing this additional risk. Indeed, the standard deviation of the returns to stocks (about 20 percent a year historically) is larger than that of the returns to T-bills (about 4 perce ...
A Primer on Inflation
... economy, rendering decision-making and forward planning by consumers, businesses, and government difficult. Eventually, inflation may strain a country’s social fabric as each group in society competes with other groups to ensure its wages are keeping up with the rising level of prices. The social an ...
... economy, rendering decision-making and forward planning by consumers, businesses, and government difficult. Eventually, inflation may strain a country’s social fabric as each group in society competes with other groups to ensure its wages are keeping up with the rising level of prices. The social an ...
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... contrast the insurance CAPM and the option pricing models over a range of values for each parameter. However, there has been no systematic comparison of all the financial pricing models or any documentation explaining how the relevant parameters should be determined for a particular insurer. This pa ...
... contrast the insurance CAPM and the option pricing models over a range of values for each parameter. However, there has been no systematic comparison of all the financial pricing models or any documentation explaining how the relevant parameters should be determined for a particular insurer. This pa ...
0538479736_265849
... Trade receivables, generally most significant category of receivables, result from the normal activities of a business. Trade receivables may be evidenced by a formal written promise to pay and classified as notes receivables. In its broadest sense, the term receivable is applicable to all claims ag ...
... Trade receivables, generally most significant category of receivables, result from the normal activities of a business. Trade receivables may be evidenced by a formal written promise to pay and classified as notes receivables. In its broadest sense, the term receivable is applicable to all claims ag ...
The Effect of Monetary Policy on Private Sector Investment in Kenya
... arising from a tax cut or an increase in government consumption spending. This induces increased public debt which he describes as; “the decline in private investment that may result from a tax cut financed by a government budget deficit and the decrease in private consumption and investment that re ...
... arising from a tax cut or an increase in government consumption spending. This induces increased public debt which he describes as; “the decline in private investment that may result from a tax cut financed by a government budget deficit and the decrease in private consumption and investment that re ...
This PDF is a selection from an out-of-print volume from... of Economic Research Volume Title: American Economic Policy in the 1980s
... 1980s. This is combined with an effort to interpret the effects that monetary policy was having on the evolution of the economy and to assess critically the conduct of that policy. The interpretative effort is based not on a formally specified, statistically estimated econometric model, but rather o ...
... 1980s. This is combined with an effort to interpret the effects that monetary policy was having on the evolution of the economy and to assess critically the conduct of that policy. The interpretative effort is based not on a formally specified, statistically estimated econometric model, but rather o ...
This PDF is a selection from an out-of-print volume from... Bureau of Economic Research
... to have a large impact on investment decisions-larger, perhaps, than a change in interest rates. This theoretical literature and the insight it provides may help to explain why neoclassical investment theory has so far failed to provide good empirical models of investment behavior and has led to ove ...
... to have a large impact on investment decisions-larger, perhaps, than a change in interest rates. This theoretical literature and the insight it provides may help to explain why neoclassical investment theory has so far failed to provide good empirical models of investment behavior and has led to ove ...
Chapter 36 MC — Five Debates Over Macroeconomic Policy
... TOP: Policy lags MSC: Definitional 22. Opponents of using policy to stabilize the economy generally believe that a. neither fiscal nor monetary policy have much impact on aggregate demand. b. attempts to stabilize the economy can increase the magnitude of economic fluctuations. c. unemployment and i ...
... TOP: Policy lags MSC: Definitional 22. Opponents of using policy to stabilize the economy generally believe that a. neither fiscal nor monetary policy have much impact on aggregate demand. b. attempts to stabilize the economy can increase the magnitude of economic fluctuations. c. unemployment and i ...
The postbellum deflation and its lessons for today
... period of deflation persisted for about thirty years while the economy grew and has been cited by some observers as evidence for benign deflation (Bordo & Redish, 2004; Bordo et al., 2004). Others observers contend, however, that although there was economic growth during this time the deflation was ...
... period of deflation persisted for about thirty years while the economy grew and has been cited by some observers as evidence for benign deflation (Bordo & Redish, 2004; Bordo et al., 2004). Others observers contend, however, that although there was economic growth during this time the deflation was ...
Mankiw 5/e Chapter 11: Aggregate Demand II
... ~The policy response~ 1. Fiscal policy • large long-term tax cut, immediate $300 rebate checks • spending increases: aid to New York City & the airline industry, war on terrorism 2. Monetary policy • Fed lowered its Fed Funds rate target 11 times during 2001, from 6.5% to 1.75% • Money growth increa ...
... ~The policy response~ 1. Fiscal policy • large long-term tax cut, immediate $300 rebate checks • spending increases: aid to New York City & the airline industry, war on terrorism 2. Monetary policy • Fed lowered its Fed Funds rate target 11 times during 2001, from 6.5% to 1.75% • Money growth increa ...
FX Outlook: 2016
... the US may not generate large positive spillovers for the rest of the world including the trade oriented Asian economies. Conversely, weakening growth in emerging market economies may restrain US economic activity somewhat. Core PCE inflation has also not risen significantly even as headline unemplo ...
... the US may not generate large positive spillovers for the rest of the world including the trade oriented Asian economies. Conversely, weakening growth in emerging market economies may restrain US economic activity somewhat. Core PCE inflation has also not risen significantly even as headline unemplo ...
Interest rate
An interest rate is the rate at which interest is paid by borrowers (debtors) for the use of money that they borrow from lenders (creditors). Specifically, the interest rate is a percentage of principal paid a certain number of times per period for all periods during the total term of the loan or credit. Interest rates are normally expressed as a percentage of the principal for a period of one year, sometimes they are expressed for different periods such as a month or a day. Different interest rates exist parallelly for the same or comparable time periods, depending on the default probability of the borrower, the residual term, the payback currency, and many more determinants of a loan or credit. For example, a company borrows capital from a bank to buy new assets for its business, and in return the lender receives rights on the new assets as collateral and interest at a predetermined interest rate for deferring the use of funds and instead lending it to the borrower.Interest-rate targets are a vital tool of monetary policy and are taken into account when dealing with variables like investment, inflation, and unemployment. The central banks of countries generally tend to reduce interest rates when they wish to increase investment and consumption in the country's economy. However, a low interest rate as a macro-economic policy can be risky and may lead to the creation of an economic bubble, in which large amounts of investments are poured into the real-estate market and stock market. In developed economies, interest-rate adjustments are thus made to keep inflation within a target range for the health of economic activities or cap the interest rate concurrently with economic growth to safeguard economic momentum.