Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

If you need an accessible version of this item please contact JSTOR User Support

Cross-Country Variation in the Liquidity Effect: The Role of Financial Markets

William D. Lastrapes and W. Douglas McMillin
The Economic Journal
Vol. 114, No. 498 (Oct., 2004), pp. 890-915
Published by: Wiley on behalf of the Royal Economic Society
Stable URL: http://www.jstor.org/stable/3590243
Page Count: 26
  • Read Online (Free)
  • Subscribe ($19.50)
  • Cite this Item
If you need an accessible version of this item please contact JSTOR User Support
Cross-Country Variation in the Liquidity Effect: The Role of Financial Markets
Preview not available

Abstract

This paper examines cross-country variation in the liquidity effect - the negative response of interest rates to money supply shocks - focusing on the role of financial factors in explaining this variation. We estimate the liquidity effect for each of 21 countries using VAR models in which money supply shocks are restricted to be neutral in the long-run, then regress the estimated liquidity effect on financial market variables across countries. We find that financial factors play an important role in determining the magnitude of the liquidity effect, and that this evidence is most consistent with generalised versions of limited-participation models.

Page Thumbnails

  • Thumbnail: Page 
890
    890
  • Thumbnail: Page 
891
    891
  • Thumbnail: Page 
892
    892
  • Thumbnail: Page 
893
    893
  • Thumbnail: Page 
894
    894
  • Thumbnail: Page 
895
    895
  • Thumbnail: Page 
896
    896
  • Thumbnail: Page 
897
    897
  • Thumbnail: Page 
898
    898
  • Thumbnail: Page 
899
    899
  • Thumbnail: Page 
900
    900
  • Thumbnail: Page 
901
    901
  • Thumbnail: Page 
902
    902
  • Thumbnail: Page 
903
    903
  • Thumbnail: Page 
904
    904
  • Thumbnail: Page 
905
    905
  • Thumbnail: Page 
906
    906
  • Thumbnail: Page 
907
    907
  • Thumbnail: Page 
908
    908
  • Thumbnail: Page 
909
    909
  • Thumbnail: Page 
910
    910
  • Thumbnail: Page 
911
    911
  • Thumbnail: Page 
912
    912
  • Thumbnail: Page 
913
    913
  • Thumbnail: Page 
914
    914
  • Thumbnail: Page 
915
    915