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Money and the Size of Transactions
Zeira, Joseph - C.E.P.R. Discussion Papers - 2005
the demand for cash and demand deposits. Thus consumers use cash for small transactions, demand deposits for larger …Consumers make transactions of different sizes over time. This paper shows that this fact, together with transaction … purchase different sizes of transactions. This can explain the demand for money itself, the precautionary demand for money, and …
Persistent link: https://www.econbiz.de/10005666420
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Immigration and large banknotes
Fischer, Andreas M - C.E.P.R. Discussion Papers - 2010
Do immigrants have a higher demand for large denominated banknotes than natives? This micro study examines whether … foreign-to-native ratio. The evidence for 251 Swiss municipalities finds that immigrants hoard fewer CHF 1,000 banknotes than …
Persistent link: https://www.econbiz.de/10008682884
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Inefficient Provision of Liquidity
Hart, Oliver; Zingales, Luigi - C.E.P.R. Discussion Papers - 2011
We study an economy where the lack of a simultaneous double coincidence of wants creates the need for a relatively safe asset (money). We show that, even in the absence of asymmetric information or an agency problem, the private provision of liquidity is inefficient. The reason is that liquidity...
Persistent link: https://www.econbiz.de/10009246599
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Should We be Afraid of Friedman's Rule?
Uhlig, Harald - C.E.P.R. Discussion Papers - 2000
Should one think of zero nominal interest rates as an undesirable liquidity trap or as the desirable Friedman rule? I use three different frameworks to discuss this issue. First, I restate Cole and Kocherlakota's (1998) analysis of Friedman's rule: short run increases in the money stock -...
Persistent link: https://www.econbiz.de/10005788876
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Money and Liquidity in Financial Markets
Nyborg, Kjell G; Östberg, Per - C.E.P.R. Discussion Papers - 2010
We argue that there is a connection between the interbank market for liquidity and the broader financial markets, which has its basis in demand for liquidity by banks. Tightness in the interbank market for liquidity leads banks to engage in what we term "liquidity pull-back," which involves...
Persistent link: https://www.econbiz.de/10008550326
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Helicopter Money: Irredeemable Fiat Money and the Liquidity Trap
Buiter, Willem H. - C.E.P.R. Discussion Papers - 2004
The Paper provides a formalization of the monetary economics folk proposition that government fiat money is an asset of the holder (the private sector) but not a liability of the issuer (the state). Money is 'net wealth' in the limited sense that, after consolidation of the intertemporal budget...
Persistent link: https://www.econbiz.de/10005504641
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Banks Are Where The Liquidity Is
Hart, Oliver; Zingales, Luigi - C.E.P.R. Discussion Papers - 2014
What is so special about banks that their demise often triggers government intervention? In this paper we show that, even ignoring interconnectedness issues, the failure of a bank causes a larger welfare loss than the failure of other institutions. The reason is that agents in need of liquidity...
Persistent link: https://www.econbiz.de/10011084676
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Liquidity and Inefficient Investment
Hart, Oliver; Zingales, Luigi - C.E.P.R. Discussion Papers - 2013
We study the role of fiscal policy in a complete markets model where the only friction is the non-pledgeability of human capital. We show that the competitive equilibrium is constrained inefficient, leading to too little risky investment. We also show that fiscal policy following a large...
Persistent link: https://www.econbiz.de/10011084716
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When bigger isn’t better: Bail outs and bank behaviour
Li, Han Hao; Miller, Marcus; Zhang, Lei - C.E.P.R. Discussion Papers - 2011
The traditional theory of commercial banking explains maturity transformation and liquidity provision assuming no asymmetric information and no excess profits. It captures the possibility of bank runs and business cycle risk; but it ignores the moral hazard problems connected with risk-taking by...
Persistent link: https://www.econbiz.de/10009320408
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Is the Friedman Rule Optimal When Money is an Intermediate Good?
Correia, Isabel; Teles, Pedro - C.E.P.R. Discussion Papers - 1996
transactions costs, it is optimal to set the inflation tax to zero when seigniorage is replaced by revenue from distortionary taxes …
Persistent link: https://www.econbiz.de/10005666470