Federal Reserve Bank of St. Louis

About: Federal Reserve Bank of St. Louis is a other organization based out in St Louis, Missouri, United States. It is known for research contribution in the topics: Monetary policy & Inflation. The organization has 203 authors who have published 1650 publications receiving 46084 citations.

Universal Banking and the Performance of German Firms

Abstract: Universal banking is an alternative mechanism to a stock market for risk-sharing, for providing information for guiding investment, and for contesting corporate governance. In Germany, where the stock market has historically been small, banks hold equity stakes in firms and have proxy voting rights over other agents' shares. In addition, banks lend to firms and have representatives on corporate boards. If a banking relationship is a substitute for the stock market, then interaction with a bank should improve the performance of firms. But, if banks have private information about firms that they lend to and have monopolistic control over access to external capital markets, then bank interests may conflict with those of other equityholders, especially those whose shares are voted by the banks in proxy. We empirically investigate the influence of banks on the performance of German firms taking account of banks' equity holdings, the extent of banks' proxy voting rights, and the ownership structure of the firms' equity. We test for conflicts-of-interest in bank behavior and ask whether the relationship between banks and firms has changed between the 1970s and 1980s.

The Daily and Policy-Relevant Liquidity Effects

Abstract: The phrase "liquidity effect" was introduced by Milton Friedman (1969) to describe the first of three effects on interest rates caused by an exogenous change in the money supply. The lack of empirical support for the liquidity effect using monthly and quarterly data led Hamilton (1997) to suggest that more convincing evidence of this effect could be obtained using daily data - estimating the daily liquidity effect. This paper investigates the implications of the daily liquidity effect for Friedman's (policy-relevant) liquidity effect using a comprehensive model of the Fed's daily operating procedure. The evidence indicates that it is no easier to find convincing evidence of a policy-relevant liquidity effect using daily data than it has been using lower frequency data.

The Cyclical Properties of Disaggregated Capital Flows

Abstract: We analyze the second-moment properties of the components of international capital flows and their relationship to business cycle variables (output, investment, and real interest rate) in 22 industrial and emerging countries. Total inward flows are procyclical with respect to all three macro variables. Net outward flows are countercyclical with respect to output and investment in most industrial and emerging countries. Disaggregated inward flows positively comove with output in industrial countries and with investment and the real interest rate in the G7 economies. Inward foreign direct investment is the only non-procyclical type of inward capital flows (with respect to output) in the developing economies. Formal statistical tests based on nonparametric bootstrap techniques detect significant variance increases in all G7 countries' disaggregated capital flows over exogenous and endogenously estimated breaks.

Foreign Direct Investment, Productivity, and Country Growth: An Overview

Abstract: The authors review the empirical literature that studies the relationship between foreign direct investment, productivity, and growth using aggregate data and focus on two questions: Is there evidence of a positive relationship between foreign direct investment and national growth? And does the output of the "multinational sectors" exhibit higher labor productivity? The authors also briefly discuss how the microeconomic evidence and a number of aggregation and composition problems might help explain the ambiguous results in this literature.