This paper considers a monetary growth model in which banks provide liquidity, and in which a government finances a deficit by printing money and selling bonds. In this context, I examine the possibility that the government may want to impose binding reserve requirements on banks' holdings of...

In this paper I consider a monetary growth model in which banks provide liquidity, and the government fixes a constant rate of money creation. There are two underlying assets in the economy, money and capital. Money is dominated in rate of return. In contrast to other papers with a larger set of...