2 Macroeconomic Effects of the Interest Rate Level

《2 Macroeconomic Effects of the Interest Rate Level》由会员上传分享，免费在线阅读，更多相关内容在学术论文-天天文库。

1、2MacroeconomicEffectsoftheInterestRateLevel:GrowthandFluctuationsinanEconomywithBankCapitalAdequacyStandardsGianfrancoGiulioniDepartmentofQuantitativeMethodsandEconomicTheory,UniversityofChieti-Pescara,Italyg.giulioni@unich.it2.1IntroductionAlargepartofthemacroe

2、conomicliteratureisdedicatedtoidentifyingthedeterminantsoftwophenomena:thegrowthandfluctuationsoftheaggregateoutput.Amongtheproposedexplanations,theoneconcern-ingfinancialfactors(seeGertler,1988,forasurvey)isthatadoptedinthisstudy.Ourgoalistoinvestigatehowtheinte

3、restrateaffectsthegrowthrateandfluctuations(representedbythegrowthvolatility)oftheecon-omywhenthebankingsectormatters.1Intermediariesandespeciallythebankingsectorhavebeentheobjectofincreasinginterestinrecentyears,becauseitcouldbethecauseofseriouscrisisduetotheint

4、erac-tionsontheinterbankmarketandtheconsequentcontagioneffectofaneventualbankfailure.Inreallife,theimportanceofbank’sfinan-cialsoundnesswasrecognizedbytheBaselaccords(BaselCommittee,2003,1998)thatimposeaminimumcapitalizationlevelonbanks.2Aswe’llseeshortlythisisab

5、asicingredientofthemodelpresentedinthispaper.Thepaperisorganizedasfollows.Afterthisintroduction,theagentsandtheirbehaviorarepresentedanddiscussedinsection2.2.Insec-1Theliteratureonthistopiciswide.AsexamplesonecanseeLevine(1997)forasurveyonfinancialdevelopmentand

6、growth;GreenwaldandStiglitz(1993)foratheoreticalmodelonfinancialmarketsimperfectionsandbusinesscycles,andBecketal.(2006)foranempiricalpaperonfinancialintermediarydevelopmentandgrowthvolatility.2Therelationshipbetweenadequatecapitalratiosandbankfailureisanalyzedby

7、Estrellaetal.(2000).18GianfrancoGiulionition2.3themicroeconomicequationsobtainedinsection2.2areturnedintomacroeconomicones.Thisallowsustoderiveourmaintheoreticalresult:thegrowthrateoftheeconomyandtoanalyzeitsdeterminants.Theaggregationinthissectionemploysthecom

8、monlyuseddeviceoftherepresentativeagent.Althoughitisaveryconvenientmakeshift,thiswayofobtainingmacroeconomicresultshidesseveraldrawbacks(seeKirman,1992,forexample).Insection