Journal of Finance Vol. 40 No. 4 1985
Optimal Bank Behavior under Uncertain Inflation
Abstract
In this paper, we derive a model of the individual banking firm facing stochastic inflation. The bank is considered as a depository financial intermediary operating in the primary market as a multiproduct price discriminating firm. A secondary market is also considered where liquidity surpluses and deficits are traded. Two types of assets and liabilities are assumed: deposits and loans linked to a general price level and nonlinked instruments. Effects of changes in the parameters such as inflation rate and variability, reserve requirements are analyzed.
- DOI
- 10.1111/j.1540-6261.1985.tb02369.x
- Volume
- 40
- Issue
- 4
- Pages
- 1159-1171
- Language
- en
- Sources
- crossref openalex