Perfect substitution in the models of the CD market
By: Arthur J. Rolnick
Series: Staff report -- # 41; Staff report (Federal Reserve Bank of Minneapolis. Research Department : Online) -- 41.
Publisher: Federal Reserve Bank of Minneapolis
Published: 1979
Place of publication: Minneapolis, Minn.]
Language: eng
Format: [electronic resource] /
Subjects: Certificates of deposit; Ratings and rankings; Mathematical models
Description: "As the CD market has become an important source of bank funds, it has also become an important market for policymakers to understand.  But so far model builders have not recognized the significance of assuming that new and old CDs are perfect substitutes.  Therefore, they have misused the assumption, discarded relevant data, and ignored evidence inconsistent with perfect substitution.  This study shows that models of the CD market should not treat new and old issues as perfect substitutes and that they should not drop observations when market rates are above the Regulation Q ceiling"--Federal Reserve Bank of Minneapolis web site.
Notes: Title from PDF file as viewed on 10/16/2007.

Includes bibliographical references.

Also available in print.

System requirements: Adobe Acrobat Reader.

Mode of access: World Wide Web.