Can financial innovation help to explain the reduced volatility of econonomic activity?
By: Karen E. Dynan, Douglas W. Elmendorf, and Daniel E. Sichel.
Contributors: Elmendorf, Douglas W.; Sichel, Daniel E.
Series: Finance and economics discussion series ;; 2005-54; Finance and economics discussion series (Online) ;; 2005-54.
Publisher: Federal Reserve Board
Published: 2005
Place of publication: Washington, D.C
Language: eng
Format: Electronic resource
Description: "The stabilization of economic activity in the mid 1980s has received considerable attention.  Research has focused primarily on the role played by milder economic shocks, improved inventory management, and better monetary policy.  This paper explores another potential explanation: financial innovation.  Examples of such innovation include developments in lending practices and loan markets that have enhanced the ability of households and firms to borrow and changes in government policy such as the demise of Regulation Q.  We employ a variety of simple empirical techniques to identify links between the observed moderation in economic activity and the influence of financial innovation on consumer spending, housing investment, and business fixed investment.  Our results suggest that financial innovation should be added to the list of likely contributors to the mid-1980s stabilization"--Federal Reserve Board web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 12/8/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.