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.

Government policy in monetary economies

Abstract: I study how the specic details of a micro founded monetary economy aect the determination of government policy. I consider three variants of the Lagos-Wright monetary framework: a benchmark were all markets are competitive; a case which allows for nancial intermediaries; and a case with trading frictions. Although intitutions/frictions are shown to have a signicant structural impact in the determination of policy, the calibrated articial economies are observationally equivalent in steady state. The policy response to aggregate shocks is qualitatively similar in the variants considered. However, there are signicant quantitative dierences in the response of government policy to productivity shocks, mainly due to the idiosyncratic behavior of money demand. The variants with no trading frictions display the best t to U.S. post-war data.

Immigration Policy and Counterterrorism

Abstract: A terrorist group, based in a developing (host) country, draws unskilled and skilled labor from the productive sector to conduct attacks in that nation and abroad. The host nation chooses proactive countermeasures. Moreover, a targeted developed nation decides its optimal mix of immigration quotas and defensive counterterrorism actions. Even though proactive measures in the host country may not curb terrorism directed at it, it may still be advantageous in terms of national income. Increases in the unskilled immigration quota augment terrorism against the developed country. By contrast, increases in the skilled immigration quota can reduce terrorism in the developed country if skilled migrants have a small marginal impact on terrorism there. When the developed country assumes a leadership role, it strategically should reduce its skilled immigration quota to induce more proactive measures in the host developing country.

Interest on Reserves, Interbank Lending, and Monetary Policy

Abstract: A two-sector general equilibrium banking model is constructed to study the functioning of a floor system of central bank intervention. Only retail banks can hold reserves, and these banks are also subject to a capital requirement, which creates balance sheet costs' of holding reserves. An increase in the interest rate on reserves has very different qualitative effects from a reduction in the central bank's balance sheet. Increases in the central bank's balance sheet can have redistributive effects, and can reduce welfare. A reverse repo facility at the central bank puts a floor under the interbank interest rate, and is always welfare improving. However, an increase in reverse repos outstanding can increase the margin between the interbank interest rate and the interest rate on government debt.

The information technology revolution and the unsecured credit market

Abstract: The information technology (IT) revolution coincided with the transformation of the U.S. unsecured credit market. Households' borrowing increased rapidly and there was an even faster increase in bankruptcy filings. A risk of default model with asymmetric information and costly screening is introduced to study this period. When information costs are high, the design of contracts under private information prevents some households from borrowing with a risk of default. As information costs drop, households borrow more and bankruptcy filings increase. Quantitative exercises suggest that the IT revolution may have played an important role in the transformation of the unsecured credit market. (JEL E43, E44, G33)

National Monetary Policy by Regional Design: The Evolving Role of the Federal Reserve Banks in Federal Reserve System Policy

Abstract: The Governing Council of the European System of Central Banks (ESCB) has been charged with determining and implementing the monetary policy of the European Community. The Council will include the six members of the European Central Bank’s Executive Committee and the central bank governors of the European Community’s eleven member states. The Federal Open Market Committee (FOMC) of the U.S. Federal Reserve System has similar duties and structure. Like the ESCB’s Governing Council, the FOMC is the principal monetary policymaking committee of the Federal Reserve System. It consists of the seven members of the Board of Governors of the Federal Reserve System and the presidents of the twelve regional Federal Reserve Banks (though only five presidents may vote on policy at any one time).