Near integration, bank reluctance, and discount window borrowing

Donald H. Dutkowsky, Suzanne K. McCoskey

Research output: Contribution to journalArticlepeer-review

2 Scopus citations


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

Original languageEnglish (US)
Pages (from-to)1013-1036
Number of pages24
JournalJournal of Banking and Finance
Issue number6
StatePublished - Jun 2001


  • Bank reluctance
  • Borrowed reserves
  • Discount window
  • Dynamic implicit cost
  • E52
  • Near integration

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


Dive into the research topics of 'Near integration, bank reluctance, and discount window borrowing'. Together they form a unique fingerprint.

Cite this