Staggered loan contract in a new keynesian framework

Download

index.pdf

Date

2009

Author

Alp, Harun

Metadata

Show full item record

Item Usage Stats

115
views

52
downloads

This thesis aims to understand the role of interest rate setting behavior of the banks for the transmission of technology, monetary policy and loan rate shocks into the real economy. To this end, we introduce a monopolistically competitive banking sector into a New Keynesian model. Here, each bank can change its loan rate only infrequently in the fashion of Calvo type staggered contract. This setting implies that the adjustment of the aggregate loan rate is sticky, which is consistent with the empirical evidence. The results show that having sticky adjustment in the loan market changes the dynamics of the model significantly. Following each shock, the sluggish adjustment of the loan rate affects the amount of loan used by the borrowers considerably. This is the main reason behind the differentials across the impulse responses of the model with sticky loan rate and flexible loan rate.

Subject Keywords

Economics., Banking Sector.

URI

http://etd.lib.metu.edu.tr/upload/3/12610810/index.pdf
https://hdl.handle.net/11511/18624

Collections

Graduate School of Social Sciences, Thesis

Suggestions

OpenMETU
Core

An empirical study on early warning systems for banking sector Boyraz, Mustafa Fatih; Gaygısız Lajunen, Esma; Department of Economics (2012) Early Warning Systems (EWSs) for banking sectors are used to measure occurrence risks of banking crises, generally observed with a rundown of bank deposits and widespread failures of financial institutions. In countries with a small number of banks, for example Turkey with 48 banks (BDDK, 2011), every bank may be considered to have a systematic importance since the failure of any individual bank may carry a potential threat to lead to a banking crisis. Taking into account this fact the present study focuses...
Dynamics of sticky information and sticky price models in a New Keynesian DSGE framework Arslan, M. Murat (Elsevier BV, 2008-11-01) Recent literature on monetary policy analysis extensively uses the sticky price model of price adjustment in a New Keynesian Macroeconomic framework. This price setting model, however. has been criticized for producing implausible results regarding inflation and output dynamics. This paper examines and compares dynamic responses of the sticky price and sticky information models to a cost-push shock in a New Keynesian DSGE framework. It finds that the sticky information model produces more reasonable dynamic...
Multiregional social accounting matrix and multiplier analysis: an application for Turkish economy Erdoğan, Eda; Voyvoda, Ebru; Department of Economics (2011) Social accounting matrix (SAM) is one of the tools used in regional economic analysis, enabling understanding the structure of the economy as well as analyzing the impacts of policies or exogenous shocks. In this thesis, a two-region SAM of Turkey is constructed for the year 2002 and the findings of multiplier analysis are presented. To this end, first, a two-region input-output (I-O) table is constructed using location quotient (LQ) method and using this two-region I-O table, a two-region SAM is compiled. ...
Interest rates and monetary policy Gazioglu, S.; McCausland, W. D. (Informa UK Limited, 2009-01-01) This article conducts a thorough intertemporal analysis of nominal interest rate based monetary policy. Its main contribution is to show how such a policy can have different effects depending on the assumptions made about the saving and borrowing behaviour of firms. We consider two cases: (i) consumers are savers and firms are borrowers and (ii) both consumers and firms are borrowers (the nation as a whole is borrowing from abroad). In one case we confirm conventional wisdom, but in the other case we find t...
Socio-economic transformation of financial capital in Turkey after 1980's Tacer, Ali Özgür; Şen, Mustafa; Department of Sociology (2004) The study of money and banking is largely considered the purview of economics. Nevertheless, money theme cannot be neglected by social analysis for money is a social construct, embedded in social interactions. Financial system, money̕s highest level of institutionalization, also cannot be abstracted from social and political sub-structure. In this thesis we tried to look at the way in which Turkish financial transformation in early 1980̕s has found its reflections on social sphere; in terms of changing soci...

Citation Formats

H. Alp, “Staggered loan contract in a new keynesian framework,” M.S. - Master of Science, Middle East Technical University, 2009.