An issue that is less well understood, however, is whether this buffering role of profit margins has changed over time – that is, whether structural changes in the profitability of firms have increased or reduced the role of profits in affecting aggregate price dynamics. My starting point for answering this question is the evolution of the profit share over time.
Technically, Eurodollar deposits are dollar-denominated deposits held at non-U.S. banks, but regulatory and technological developments have made these deposits easily tradable even by U.S. banks and by many nonbank institutions not eligible to participate in the fed funds market. Accessible to a wide range of borrowers and lenders and operating virtually around the clock, the Eurodollar market has grown rapidly and become highly liquid.