Bank Market Structure and Monetary Control

VanHoose, David D.

doi:10.2307/1992626

Cited by 52 publications

(23 citation statements)

References 3 publications

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“…The basic structure of the model can be understood by focusing on the deposit market; an analogous exposition for the loan market appears in the . To model the nonbank public's demand side of the deposit market, we consider a first‐order multivariate Taylor‐series approximation to the deposit demand function in Van Hoose (1985, 1988), which in turn is built in part on work by Dasgupta and Stiglitz (1983). This demand function and its first‐order approximation are given by, respectively, where D t + j is the quantity of deposits demanded at time t+j , is the market deposit rate, is the competitively determined security rate, Ω is a positive parameter, ɛ and α are nonnegative parameters with ɛ > 1, ≡, and and are long‐run, steady‐state values of the deposit and security rates 1 .…”

Section: The Structure Of Bank Retail Marketsmentioning

confidence: 99%

Imperfect Competition in Bank Retail Markets, Deposit and Loan Rate Dynamics, and Incomplete Pass Through

Kopecky¹,

Hoose²

2012

J of Money Credit Banking

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This paper examines determinants of pass through from the market interest rate to bank retail deposit and loan rates. A dynamic adjustment cost model with imperfect competition implies that these rates depend on own lagged values and on lagged, current, and expected future values of the security rate. Greater competition in retail markets reduces the impact of lagged and expected rates on current retail rates while raising the effect of the current security rate, yielding greater pass through. These results have important implications for both the specifications used in empirical work and biases introduced into estimates of pass‐through effects.

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Section: The Structure Of Bank Retail Marketsmentioning

confidence: 99%

Imperfect Competition in Bank Retail Markets, Deposit and Loan Rate Dynamics, and Incomplete Pass Through

Kopecky¹,

Hoose²

2012

J of Money Credit Banking

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“…Extending the model to include multiple imperfectly competitive loan and deposit markets would imply, as shown for instance by VanHoose (1985) and Hannan (1991), that for any two markets for loans denoted loan 1 and loan 2, the ratio of loan rates charged by the monopoly bank will be r i Of course, banks may lend or issue deposits in more than one market.…”

Section: Monopolistic and Monopsonistic Interest Rate Determination Imentioning

confidence: 99%

“…One simple approach to examining banking markets between the extremes of perfect competition and monopoly is a Cournot-Nash framework-that is, a setting assuming quantity rivalry among banks offering homogeneous products-based on VanHoose (1985), which in turn builds on Dasgupta and Stiglitz (1981). Suppose that an individual bank i is one of m banks competing in the market for loans and nrivals in bank deposit markets.…”

Section: Oligopoly and Oligopsony In Banking Marketsmentioning

confidence: 99%

The Industrial Organization of Banking

VanHoose¹

2010

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“…The issue of how the degree of competition in the market for bank credit impacts the effectiveness of monetary policy was first examined from a theoretical standpoint by Aftalion and White (1978) and VanHoose (1983VanHoose ( , 1985. They show that the market structure of banking markets can have an important impact on the appropriate choice of monetary policy targets and instruments.…”

Section: Introductionmentioning

confidence: 99%