Bank Competition, Agency Costs and the Performance of the Monetary Policy

This paper extends the general equilibrium literature on bank competition in order to evaluate its role on the performance of the monetary policy. A new formulation of a financial contract taking into consideration both market power by banks as well as costly state verification is proposed here. Numerical simulations with the model economy parameterized to the Brazilian case are performed. Two cases are examined: One in which the banking sector is perfectly competitive and the other one when banks have market power. The main conclusions of the paper are the following: (1) Greater competition in the loan market enhances the response of the real economy to an interest rate shock; (2) Increased competition and/or a more efficient verification technology reduce the reaction of both the default rate and of the bank interest spread to an interest rate shock; and (3) The influence of the verification technology in the economy's dynamic response is greater when banks operate under perfect competition.

Real Balances in the Utility Function: Evidence for Brazil

The aim of this paper is to examine the relevance of a money-in-the-utility-function model for the Brazilian economy. In addition to consumption, the household is supposed to derive utility from leisure and from the holdings of real balances. The system, formed by the first-order conditions of the household intertemporal problem (Euler equations), is estimated by generalized method of moments (GMM). The results show strong support for the presence of money in the utility function for Brazil.

Does Geometric Coupling Generates Resonances?

Geometrical coupling in a co-dimensional one Randall-Sundrum scenario (RS) is used to study resonances of $p-$form fields. The resonances are calculated using the transfer matrix method. The model studied consider the standard RS with delta-like branes, and branes generated by kinks and domain-wall as well. The parameters are changed to control the thickness of the smooth brane. With this a very interesting pattern is found for the resonances. The geometrical coupling does not generate resonances for the reduced $p-$form in all cases considered.Comment: 10 pages, 10 figure

Photon mass as a probe to extra dimensions

In this manuscript we show that the geometrical localization mechanism implies a four dimensional mass for the photon. The consistence of the model provides a mass given exactly by $m_{\gamma}=\sqrt{R}/4$ where $R$ is the Ricci scalar. As a consequence, the cosmological photon has a mass related to the vacuum solution of the Einstein equation. At the present age of the universe we have a dS vacuum with $R=4\Lambda$, where Lambda is a positive cosmological constant. With this we find that $m_{\gamma}\approx 2\times 10^{-69}$ kg, which is below the present experimental upper bounds, and such correction may be observed in the next years with more precise measurements. By considering the value of $R$ inside some astrophysical sources and environments we find that the bound is also satisfied. The experimental verification of this mass, beyond pointing to the existence of extra dimensions, would imply in a fundamental change in cosmology, astrophysics and in particle physics since the same mechanism is valid for non-abelian gauge fields.Comment: 4 page