Near integration, bank reluctance, and discount window borrowing

摘要: Abstract This study puts forth stationarity considerations in explaining the observed breakdown between aggregate Discount Window borrowing and spread Federal Funds rate discount during post-1987 period. Tests with biweekly data indicate for adjustment borrowing, but cannot reject unit root spread. The Goodfriend–Dutkowsky dynamic implicit cost formulation can accommodate contrasting properties. Structural restrictions are compatible stationary a or near integrated While empirical findings from static model greater bank reluctance to borrow over time, gives considerably less support.