scholarly journals Imperfect Competition in the Inter-Bank Market for Liquidity as a Rationale for Central Banking

2008 ◽  
Author(s):  
Viral V. Acharya ◽  
Denis Gromb ◽  
Tanju Yorulmazer
Keyword(s):  
Imperfect Competition ◽  
Central Banking

scholarly journals Imperfect Competition in the Interbank Market for Liquidity as a Rationale for Central Banking

2012 ◽  
Vol 4 (2) ◽  
pp. 184-217 ◽  
Author(s):  
Viral V Acharya ◽  
Denis Gromb ◽  
Tanju Yorulmazer
Keyword(s):  
Central Bank ◽  
Market Power ◽  
Financial Crises ◽  
Imperfect Competition ◽  
Central Banking ◽  
Interbank Market ◽  
Asset Sales ◽  
Lender Of Last Resort ◽  
Interbank Lending ◽  
Liquidity Frictions

We study interbank lending and asset sales markets in which banks with surplus liquidity have market power vis-à-vis banks needing liquidity, frictions arise in lending due to moral hazard, and assets are bank-specific. Surplus banks ration lending and instead purchase assets from needy banks, an inefficiency more acute during financial crises. A central bank acting as a lender-of-last-resort can ameliorate this inefficiency provided it is prepared to extend potentially loss-making loans or is better informed than outside markets, as might be the case if it also performs a supervisory role. This rationale for central banking finds support in historical episodes. (JEL E58, G01, G21, G28, L13, N21)

Phase Model of Market Economy

2005 ◽  
pp. 41-47 ◽  
Author(s):  
N. Yegorenkov ◽  
E. Kazakova ◽  
M. Starodubtseva
Keyword(s):  
Market Economy ◽  
Consumer Goods ◽  
Imperfect Competition ◽  
Phase Model ◽  
Status Change ◽  
Means Of Production

The phase model of market economy is suggested in the article. It is formalized in the cubical equation The equation takes into account the imperfections of competition and the fact that consumer goods are produced with the help of means of production. Transitions from the imperfect competition to the perfect one and visa versa yield qualitative status change of market economy.

Sign in / Sign up

Export Citation Format

Share Document