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Monetary policy with reserves and CBDC : optimality, equivalence, and politics

Niepelt, Dirk - 2020

We analyze policy in a two-tiered monetary system. Noncompetitive banks issue deposits while the central bank issues reserves and a retail CBDC. Monies differ with respect to operating costs and liquidity. We map the framework into a baseline business cycle model with “pseudo wedges” and...

Persistent link: https://www.econbiz.de/10012318352

Fighting inflation more effectively without transferring central banks' profits to banks

De Grauwe, Paul; Ji, Yuemei - 2023

The major central banks now operate in a regime of abundance of bank reserves. As a result, they can only raise the money market rate by increasing the rate of remuneration of bank reserves. This, in turn, leads to large transfers of the central banks' profits (and more) to commercial banks that...

Persistent link: https://www.econbiz.de/10014422581

Channel systems : why is there a positive spread?

Berentsen, Aleksander; Marchesiani, Alessandro; Waller, … - 2010

An increasing number of central banks implement monetary policy via two standing facilities: a lending facility and a deposit facility. In this paper we show that it is socially optimal to implement a non-zero interest rate spread. We prove this result in a dynamic general equilibrium model...

Persistent link: https://www.econbiz.de/10008732253

China's exchange rate and financial repression : the conflicted emergence of the renminbi as an international currency

McKinnon, Ronald I.; Schnabl, Gunther - 2014

China has been provoked into speeding renminbi internationalization. But despite rapid growth in offshore financial … could attract even more hot money inflows, the People's Bank of China should focus on tightly stabilizing the yuan/ dollar … exchange rate to encourage naturally high wage increases for balancing China's international competitiveness. …

Persistent link: https://www.econbiz.de/10010249643

Does the Chinese interest rate follow the US interest rate?

Cheung, Yin-Wong (contributor); Tam, Dickson C. (contributor) - 2007

Persistent link: https://www.econbiz.de/10003496593

A role model for China? : exchange rate flexibility and monetary policy in Japan

Schnabl, Gunther (contributor); Danne, Christian (contributor) - 2007

Persistent link: https://www.econbiz.de/10003499570

China's exchange rate impasse and the weak U.S. dollar

McKinnon, Ronald I. (contributor); … - 2008

Since 2004, China has been backed into a situation where the renminbi is expected to go ever higher against the dollar ….S. dollar, the resulting monetary explosion in China contributes to the worldwide increase in primary commodity priceswith …

Persistent link: https://www.econbiz.de/10003749649

Exchange rate regime, financial market bubbles and long-term growth in China : lessons from Japan

Schnabl, Gunther - 2016

constitute long-term appreciation expectations on yuan and yen, which have made China and Japan vulnerable to U.S. interest rate … cuts and appreciation expectation shocks. For both China and Japan - at different points of time - self-fulfilling runs …, speculative bubbles and post-bubble secular stagnation. To prevent a similar scenario for China capital controls, a tighter …

Persistent link: https://www.econbiz.de/10011475972

Chinese exchange rate policy : lessons for global investors

Melvin, Michael; Westermann, Frank - 2020

, 2015, the People's Bank of China announced a new exchange rate policy where the RMB central parity rate against the USD …

Persistent link: https://www.econbiz.de/10012261124

A note on temporary supply shocks with aggregate demand inertia

Caballero, Ricardo J.; Simsek, Alp - 2022

We study optimal monetary policy during temporary supply contractions when aggregate demand has inertia and expansionary policy is constrained. In this environment, it is optimal to run the economy hot until supply recovers. Positive output gaps in the low-supply phase lessen the negative output...

Persistent link: https://www.econbiz.de/10012886884