Standard economic models hold that exchange rates are influenced by fundamental variables such as relative money …

This paper presents a dynamic general equilibrium model with sticky prices, in which "inside" money, made out of … commercial banks' liabilities, plays an active, structural role role. It is shown that, in such a model, an inside money shock … inside money shocks on output and inflation. I also simulate the effect of a banking crisis in the model. Moreover, I find …

money (bank reserves) once the policy rate had reached the lower bound. To capture the salient features of the crisis, we … projecting stable growth in broad money after the financial crisis. We also run a counterfactual which suggests that, if the … Federal Reserve had not provided bank reserves on such a large scale, broad money would have fallen, the economy might have …