TY - JOUR
T1 - Banking in computable general equilibrium economies
AU - Díaz-Giménez, Javier
AU - Prescott, Edward C.
AU - Fitzgerald, Terry
AU - Alvarez, Fernando
N1 - Funding Information:
from the NSF and the Direcci6n acknowledged. The views expressed General de Investigackjn, Ciencia herein are those of the authors.
PY - 1992
Y1 - 1992
N2 - In this paper we develop a computable general equilibrium economy that models the banking sector explicitly. Banks intermediate between households and between the household sector and the government sector. Households borrow from banks to finance their purchases of houses and they lend to banks to save for retirement. Banks pool households' savings and they purchase interest-bearing government debt and non-interest-bearing reserves. We use this structure to answer two sets of questions: one normative in nature that evaluates the welfare costs of alternative monetary and tax policies, and one positive in nature that studies the real effects of following a procyclical interest-rate policy rule.
AB - In this paper we develop a computable general equilibrium economy that models the banking sector explicitly. Banks intermediate between households and between the household sector and the government sector. Households borrow from banks to finance their purchases of houses and they lend to banks to save for retirement. Banks pool households' savings and they purchase interest-bearing government debt and non-interest-bearing reserves. We use this structure to answer two sets of questions: one normative in nature that evaluates the welfare costs of alternative monetary and tax policies, and one positive in nature that studies the real effects of following a procyclical interest-rate policy rule.
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U2 - 10.1016/0165-1889(92)90048-J
DO - 10.1016/0165-1889(92)90048-J
M3 - Article
AN - SCOPUS:38249011498
SN - 0165-1889
VL - 16
SP - 533
EP - 559
JO - Journal of Economic Dynamics and Control
JF - Journal of Economic Dynamics and Control
IS - 3-4
ER -