Discussion of “Monetary Policy, Customer Capital, and Market Power” by Morlacco and Zeke

2021 ◽  
Author(s):  
François Gourio
Keyword(s):  
Monetary Policy ◽  
Market Power ◽  
Customer Capital

scholarly journals Market Power and Monetary Policy

2019 ◽  
Author(s):  
Tommaso Aquilante ◽  
Shiv Chowla ◽  
Nikola Dacic ◽  
Andrew Haldane ◽  
Riccardo Masolo ◽  
...  
Keyword(s):  
Monetary Policy ◽  
Market Power

The New Economics at High Noon

Money ◽  
2017 ◽  
Author(s):  
John Kenneth Galbraith ◽  
James K. Galbraith
Keyword(s):  
Monetary Policy ◽  
World War Ii ◽  
Labor Force ◽  
Market Power ◽  
Harvard University ◽  
World War ◽  
The Government ◽  
Taking Action ◽  
High Noon

This chapter examines the New Economics that emerged in the years following World War II. In 1947, Seymour Harris of Harvard University, an avowed Keynesian evangelist, edited a series of essays on Keynesian ideas and entitled his volume The New Economics. Under the New Economics, employment increased more rapidly than the labor force. As a result, unemployment declined steadily and prices were held stable. The chapter considers four serious flaws of the New Economics. The first was the reliance on prediction and foresight—on taking action before need. The three other flaws all limited, even negated, the ability of the government to deal effectively with inflation. The first of these flaws was in the machinery for dealing with the now familiar problem of market power. The next flaw was the fatal inelasticity of the Keynesian system. The final flaw was the revival of faith in monetary policy.

scholarly journals Bank Market Power and the Risk Channel of Monetary Policy

2018 ◽  
Vol 2018 (006) ◽  
Author(s):  
Elena Afanasyeva ◽  
◽  
Jochen G�ntner ◽  
Keyword(s):  
Monetary Policy ◽  
Market Power

scholarly journals The Effect of Bank Heterogeneity on the Interest Rate Channel in Lebanon

2020 ◽  
Vol 9 (1) ◽  
pp. 81-95
Author(s):  
Ali Awdeh ◽  
Zouhour Jomaa ◽  
Mohamad Kassem
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Credit Risk ◽  
Market Power ◽  
Empirical Results ◽  
Loan Supply ◽  
The Interest Rate ◽  
The Impact ◽  
Transmission Of Monetary Policy ◽  
Interest Rate Channel

AbstractThe effect of bank heterogeneity on the transmission of monetary policy is capturing an increasing attention, and the debate on how bank specific characteristics may determine their reaction to monetary actions is mounting. This paper participates in this flow of research by studying the reaction of 40 banks operating in Lebanon between 1994 and 2017, to a change in lending interest rate, taking into consideration: size, market power, capitalisation, credit risk, and liquidity. The empirical results show that the impact of a change in interest rate on loan supply depends on bank market power and bank liquidity only. Consequently, interest rate channel in Lebanon operates through banks with high market power and banks with high liquidity stocks.

scholarly journals The Deposits Channel of Monetary Policy*

2017 ◽  
Vol 132 (4) ◽  
pp. 1819-1876 ◽  
Author(s):  
Itamar Drechsler ◽  
Alexi Savov ◽  
Philipp Schnabl
Keyword(s):  
Monetary Policy ◽  
Market Power ◽  
Banking System ◽  
Strong Relationship ◽  
Bank Lending ◽  
Liquidity Premium ◽  
Balance Sheets ◽  
Fed Funds Rate ◽  
Bank Balance Sheets ◽  
Transmission Of Monetary Policy

Abstract We present a new channel for the transmission of monetary policy, the deposits channel. We show that when the Fed funds rate rises, banks widen the spreads they charge on deposits, and deposits flow out of the banking system. We present a model where this is due to market power in deposit markets. Consistent with the market power mechanism, deposit spreads increase more and deposits flow out more in concentrated markets. This is true even when we control for lending opportunities by only comparing different branches of the same bank. Since deposits are the main source of liquid assets for households, the deposits channel can explain the observed strong relationship between the liquidity premium and the Fed funds rate. Since deposits are also a uniquely stable funding source for banks, the deposits channel impacts bank lending. When the Fed funds rate rises, banks that raise deposits in concentrated markets contract their lending by more than other banks. Our estimates imply that the deposits channel can account for the entire transmission of monetary policy through bank balance sheets.

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