Technological innovations and the interest rate

Detalhes bibliográficos
Autor(a) principal: Leão, E. R.
Data de Publicação: 2002
Tipo de documento: Artigo
Idioma: por
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/10071/489
Resumo: We build a dynamic general equilibrium model where there are banks that charge interest for their loans to the private sector. We look at the response of the interest rate to innovations in the banks’ technology and to innovations in the nonbank firms’ technology. We find that whereas technological innovations in the nonbanking sector put upward pressure on the interest rate, technological innovations in banks exert downward pressure on the interest rate. This property of the model is behind our main result: in stochastic simulation experiments where the technological shocks in banks are highly positively correlated with the technological shocks in firms, we obtain a strong negative correlation between the current interest rate and future values of real output. This corresponds to what the data show us [see King and Watson (1996)].
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spelling Technological innovations and the interest rateDynamic general equilibriumTechnological innovationInterest rateWe build a dynamic general equilibrium model where there are banks that charge interest for their loans to the private sector. We look at the response of the interest rate to innovations in the banks’ technology and to innovations in the nonbank firms’ technology. We find that whereas technological innovations in the nonbanking sector put upward pressure on the interest rate, technological innovations in banks exert downward pressure on the interest rate. This property of the model is behind our main result: in stochastic simulation experiments where the technological shocks in banks are highly positively correlated with the technological shocks in firms, we obtain a strong negative correlation between the current interest rate and future values of real output. This corresponds to what the data show us [see King and Watson (1996)].Dinâmia2007-07-18T10:59:59Z2002-01-01T00:00:00Z2002info:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10071/489porLeão, E. R.info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-07-25T17:45:11ZPortal AgregadorONG
dc.title.none.fl_str_mv Technological innovations and the interest rate
title Technological innovations and the interest rate
spellingShingle Technological innovations and the interest rate
Leão, E. R.
Dynamic general equilibrium
Technological innovation
Interest rate
title_short Technological innovations and the interest rate
title_full Technological innovations and the interest rate
title_fullStr Technological innovations and the interest rate
title_full_unstemmed Technological innovations and the interest rate
title_sort Technological innovations and the interest rate
author Leão, E. R.
author_facet Leão, E. R.
author_role author
dc.contributor.author.fl_str_mv Leão, E. R.
dc.subject.por.fl_str_mv Dynamic general equilibrium
Technological innovation
Interest rate
topic Dynamic general equilibrium
Technological innovation
Interest rate
description We build a dynamic general equilibrium model where there are banks that charge interest for their loans to the private sector. We look at the response of the interest rate to innovations in the banks’ technology and to innovations in the nonbank firms’ technology. We find that whereas technological innovations in the nonbanking sector put upward pressure on the interest rate, technological innovations in banks exert downward pressure on the interest rate. This property of the model is behind our main result: in stochastic simulation experiments where the technological shocks in banks are highly positively correlated with the technological shocks in firms, we obtain a strong negative correlation between the current interest rate and future values of real output. This corresponds to what the data show us [see King and Watson (1996)].
publishDate 2002
dc.date.none.fl_str_mv 2002-01-01T00:00:00Z
2002
2007-07-18T10:59:59Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10071/489
url http://hdl.handle.net/10071/489
dc.language.iso.fl_str_mv por
language por
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Dinâmia
publisher.none.fl_str_mv Dinâmia
dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron:RCAAP
instname_str Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron_str RCAAP
institution RCAAP
reponame_str Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
collection Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
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