Historically, countries have relied on seigniorage. In this paper, we explore a set of features in which a benevolent government will rely on seigniorage. We use a simple overlapping generations model with return-dominated money. Money is valued because of a reserve requirement. The government...

This paper outlines important lessons for monetary policy. In particular, the role of inflation targeting, which was much acclaimed prior to the financial crisis and since then has not lost much of its endorsement, is critically reviewed. Ignoring the relation between monetary policy and asset...

"Monetary policy acts with a lag. I liken it to a good single malt whiskey or perhaps truly great tequila: It takes time before you feel its full effect. The Fed has to be very careful now to add just the right amount of stimulus to the punchbowl without mixing in the potential to juice up...

Remarks at the Central Bank of Argentina, Buenos Aires, April 19, 2006 ; "My business contacts talk and act as if the globalization now under way will bring another decade of intense competition. This hothouse will enable--perhaps even force--businesses to keep productivity growth in the range...

Remarks at the HSBC Global Investment Seminar, London, October 10, 2006. ; "My point is simply that the committee's wisdom would be enhanced, and the economy would benefit, from having analytical tools to help us build more practicable models than what we currently have to guide our thinking as...

Economic Research Working Paper 9904

This study assesses the degree to which the liberalization of geographic banking restrictions has lived up to its promise of enhancing service accessibility in rural areas. The empirical framework is distinguished by a focus on changes in accessibility, as opposed to levels. While previous...

This paper studies the effects of monetary policy rules in a monetary union. The focus of the analysis is on the interaction between the fiscal policy of member countries (regions) and the central monetary authority. When capital markets are integrated, the fiscal policy of one country will...