Thesis (Ph. D.)--University of Wisconsin--Madison, 1971. / Typescript. Vita. eContent provider-neutral record in process. Description based on print version record. Includes bibliographical references (leaves 305-317).

Theses (M.A.)--Marshall University, 2005. / Title from document title page. Includes abstract. Document formatted into pages: contains v, 180 p. Bibliographical notes by chapters: p. 142-158. Bibliography: p. 159-180.

Thesis (Ph. D.)--Ohio State University, 1986. / Includes vita. Includes bibliographical references (leaves 108-117). Available online via OhioLINK's ETD Center.

Thesis (Ph. D.)--Ohio State University, 2007. / Title from first page of PDF file. Includes bibliographical references (p. 92-94).

Revised Feb. 1979

xii, 114 p. : ill. / The banking sector has been extensively analyzed in economics. On the microeconomic side, research has advanced our understanding of banks and the inverse relationship between market power and bank production. The macroeconomic side of research has focused on the transmission of monetary policy, and it is understood that the financial system, including banks, plays an integral role in transmitting monetary policy decisions to economic variables such as investment, consumption, and GDP. There is limited understanding, however, about how market power and bank concentration affects the transmission of monetary policy. The main focus of this dissertation is to address this gap in the literature and is achieved by three contributions. First, I develop a theory of banking behavior that accounts for competition and monetary policy. I empirically test the theory and show that banking concentration dampens the impact of monetary policy on lending activity in the short-run. My second contribution involves building a theoretical model with these short-run lending effects incorporated into an endogenous growth model that allows agents, banks, and the central bank to interact. This model shows how short-run lending is tied to growth. Again, monetary policy is less effective in markets with higher concentration. The last contribution is made by empirically testing the second contribution. The empirical findings are consistent with both the first and second contributions; banking markets with less competition adversely affect growth and also diminish the long-run impact of monetary policy. / Committee in charge: Dr. Mark Thoma, Co-Chair; Dr. Wesley Wilson, Co-Chair; Dr. Shankha Chakraborty, Member; Dr. Larry Dann, Outside Member

For the empirical macroeconomist, accounting for nonlinearities in data series by using regime switching techniques has a long history. Over the past 25 years, there have been tremendous advances in both the estimation of regime switching and the incorporation of regime switching into macroeconomic models. In this dissertation, I apply techniques from this literature to study two topics that are of particular relevance to the conduct of monetary policy: asset bubbles and the Federal Reserve’s policy reaction function. My first chapter utilizes a recently developed Markov-Switching model in order to test for asset bubbles in simulated data. I find that this flexible model is able to detect asset bubbles in about 75% of simulations. In my second and third chapters, I focus on the Federal Reserve’s policy reaction function. My second chapter advances the literature in two important directions. First, it uses meeting- based timing to more properly account for the target Federal Funds rate; second, it allows for the inclusion of up to 14 economic variables. I find that the long-run inflation response coefficient is larger than had been found in previous studies, and that increasing the number of economic variables that can enter the model improves both in-sample fit and out-of-sample forecasting ability. In my third chapter, I introduce a new econometric model that allows for Markov-Switching, but can also remove variables from the model, or enforce a restriction that there is no regime switching. My findings indicate that the majority of coefficients in the Federal Reserve’s policy reaction function have not changed over time.

The thesis contains three essays that investigate the effects of macroeconomic reforms on the Malawian economy between 1980 and 2010. Specifically, the thesis tries to answer three broad questions. First, what is the effect of financial reforms on consumption behavior in Malawi? Second, how did monetary transmission mechanism in Malawi change over time following the implementation of financial reforms? Last, how did the monetary policy respond to foreign aid increases following the implementation of financial reforms in the country? Although answers for these questions are available for other developing countries where abundant research has been conducted, this is not the case in Malawi. Existing research on Malawi has not accounted for the effects of the reforms on consumption behavior, the evolution of the transmission mechanism over time and the monetary policy impact of aid on the economy. Yet such information is very useful in the design and proper implementation of financial and monetary policies that contribute to price stability and economic growth. The first essay assesses whether financial reforms has had a statistically significant effect on Malawi consumption behaviour. More specifically, the essay starts by examining the existence of Permanent Income Hypothesis (PIH) and then proceed to assess whether the reforms have affected consumption behaviour by reducing liquidity constraints. The essay presents a robust account of the financial reforms and constructs financial reform indices for the country. These indices are then used to exam the effects of the reforms on consumption. The essay finds that the PIH does not hold in Malawi. Most consumers are current income consumers (rule-of-thumb). They consume from “hand to mouth” and very little is left to smooth consumption in their life time. The reforms did not shift current income consumers to permanent income consumers. Empirical evidence from the thesis shows that the main failure of the PIH hypothesis is due to liquidity constraint which is manifested in the under development of the financial market and unstable macroeconomic conditions in Malawi. Weak financial institutions, both structural and operational have impacted negatively on the accessibility of financial resources for most Malawians despite the reforms. This is a bigger lesson for policy makers to consider in the preparation of future broad based financial reforms. The second essay provides an empirical analysis of the lag effect of implementing financial reforms on price stability and economic growth. We use the monetary transmission mechanism framework based on the time varying parameter vector autoregressive (TVP-VAR) model with stochastic volatility. It is becoming clear from literature that financial reforms can change the transmission mechanism by changing the overall impact of the policy or by altering the transmission channels overtime. Therefore, the impact of monetary policy on price stability and output growth can vary and portray delayed effects overtime. The essay finds that inflation, real output and exchange rate responses to monetary policy shocks vary over the period under review. Importantly, beginning mid-2000, the monetary policy transmission performed consistently with predictions of economic theory and there is no evidence of price puzzle as found in the previous literature on Malawi. In the last essay, a Bayesian Dynamic Stochastic General Equilibrium (DSGE) model for Malawi is developed and estimated to account for the short-run monetary response to aid inflows in Malawi between 1980 and 2010. The model incorporated the rational expectations of economic agents based on micro foundations. The estimated model showed that monetary authorities reacted to foreign aid inflows. Based on how aid was spent and absorbed in Malawi, aid inflows appeared to be associated with depreciations of the exchange rate rather than the expected real appreciation. There is also evidence of limited impact of a positive aid shock on depreciation and inflation when RBM targets monetary aggregates compared to when the authorities use the Taylor rule and incomplete sterilisation. On the other hand, the thesis found that the implication of increased aid inflows became more prominent in an economy comprising of few economic agents having access to financial assets. Furthermore, the monetary policy responses are much clear consistent with economic theory in a market with less controls over prices and open capital account. The contribution of the thesis to the literature is that, firstly, this looks into the effects of macroeconomic reforms on economic activities in the context of a Sub-Saharan Africa country, Malawi. The thesis enhances the understanding of the effects of macroeconomic reforms on consumption, evolution of monetary policy overtime and the impact of aid inflows on the conduct of monetary policy in Malawi in ways that have not been done before. Secondly, the thesis takes advantages of multivariate econometric methodologies in an attempt to capture both the dynamics of time series data and the relationship among key macroeconomic variables. The thesis develops and estimates a DSGE model for Malawi which is derived from microeconomic foundations of optimisation problem, making it less susceptible to the Lucas critique and thus suitable for policy analysis. The results will help policy makers and development partners such as the IMF and the World Bank in the design of policies and programs that aim at improving the financial sector that is accommodative of achieving price stability and economic growth in Malawi. / Thesis (PhD)--University of Pretoria, 2014. / lk2014 / Economics / PhD / unrestricted

Central Bank communication has become, in the last period, a topic of increased interest both in academia, as well as in the process of conducting the monetary policy. This thesis addresses the communication of central banking and compares the Czech National Bank's (CNB) communication practices with the ones of the National Bank of Moldova (NBM) for the period of 2005 - 2010. Communication of both central banks is analyzed by compyling a Transparency Index, based on a detailed analysis of actual information disclosure by the two banks. In order to analyze how surprising are the monetary policy decisions in the two countries, an investigation about how much the short-term money market rates change after the monetary policy decision's announcement has been made. The results of the analyses show that the CNB has achieved almost full transparency in 2010 in conducting the monetary policy, while the NBM, even though registered a gradual increase in its transparency since 2005, still needs to put more effort into improving its communication practices. The research also reveals that the CNB manages to lower the pace of market surprises related to its monetary policy decisions, while in the case of NBM, the money market rates respond little to the policy rate changes. Also, in order to show the importance...

The general purpose of this study is to determine how South Africa’s early experience with the inflation targeting framework compares with the early experiences of Brazil, Chile, Israel, the Czech Republic and Poland. One developed economy, namely New Zealand, is included in the study since it was the pioneer of the inflation targeting framework. The experiences of these countries are compared along three dimensions: the stress tests the frameworks were subjected to and the monetary authorities’ responses to these tests; the adjustments made to the frameworks, operational and institutional procedures; and the credibility losses or gains as a result of these experiences. In order to arrive at a satisfactory conclusion to the problem a number of questions are explored. The theoretical basis of inflation targeting is analysed; the nature of South Africa’s framework is assessed to see how it conforms to general practices; South Africa’s early experience under the inflation targeting framework is assessed; and, lastly, South Africa’s experience is compared with the experiences of the six countries mentioned in the first paragraph. The assessment in this study shows that South Africa’s experience is not out of line when compared with other emerging-market countries. Many of the emerging markets surveyed faced significant stress tests and long-term obstacles that contributed to their failure to achieve their inflation targets in the early years of implementation. In response, the central banks surveyed sought to focus on the primary goal of monetary policy and to counter the second-round effects. As they became more experienced at operating an inflation targeting framework, some of the countries refined their frameworks. Ultimately, the survey draws lessons from the common experience of the seven countries assessed. It shows that credibility is key to the success of an inflation targeting framework, as is a supportive context. However, the survey also highlights that simply judging a country’s monetary policy success on whether it achieves its inflation targets is too limited an assessment for justifying the merit of an inflation targeting framework. / Prof. S. Chetty