Post by arfankj4 on Mar 7, 2024 3:15:35 GMT
Empirical evidence is consistent with this dynamic synergistic model of financial and technological innovation. Publisher s link http hbs faculty Publication Files financial innovation final apr a bd d d af e d fed ee .pdf pdf MARCH AMERICAN ECONOMIC JOURNAL MACROECONOMICS A Behavioral Model of the Popularity and Regulation of Demandable Liabilities By Rotemberg Julio J.
ABSTRACT—Overoptimism regarding one s ability to arrive early in a queue is shown to rationalize deposit contracts in which people can withdraw their funds on demand even if consumption takes place later. Capitalized institutions serving overoptimistic depositors emerge in equilibrium even if depositors and bank owners have identical preferences Poland Mobile Number List and investment opportunities. Consistent with the evidence runs can lead people to move their deposits from one intermediary to another. Regulatory policies including deposit insurance minimum capital requirements and restrictions on the assets held by depository institutions can increase the ex ante welfare of depositors. WORKING PAPERS Capital Requirements Risk.
Choice and Liquidity Provision in a Business C—This paper develops a quantitative dynamic general equilibrium model in which households preferences for safe and liquid assets constitute a violation of Modigliani and Miller. I show that the scarcity of these coveted assets created by increased bank capital requirements can reduce overall bank funding costs and increase bank lending. I quantify this mechanism in a two sector business cycle model featuring a banking sector that provides liquidity and has excessive risk taking incentives. Under reasonable parameterizations the marginal benefit of higher capital requirements related to this channel significantly exceeds the marginal cost indicating that U.S.
ABSTRACT—Overoptimism regarding one s ability to arrive early in a queue is shown to rationalize deposit contracts in which people can withdraw their funds on demand even if consumption takes place later. Capitalized institutions serving overoptimistic depositors emerge in equilibrium even if depositors and bank owners have identical preferences Poland Mobile Number List and investment opportunities. Consistent with the evidence runs can lead people to move their deposits from one intermediary to another. Regulatory policies including deposit insurance minimum capital requirements and restrictions on the assets held by depository institutions can increase the ex ante welfare of depositors. WORKING PAPERS Capital Requirements Risk.
Choice and Liquidity Provision in a Business C—This paper develops a quantitative dynamic general equilibrium model in which households preferences for safe and liquid assets constitute a violation of Modigliani and Miller. I show that the scarcity of these coveted assets created by increased bank capital requirements can reduce overall bank funding costs and increase bank lending. I quantify this mechanism in a two sector business cycle model featuring a banking sector that provides liquidity and has excessive risk taking incentives. Under reasonable parameterizations the marginal benefit of higher capital requirements related to this channel significantly exceeds the marginal cost indicating that U.S.