One important function of banks is to issue liabilities, like demand deposits, that are relatively safe and also liquid (usable as means of payment). We introduce risk of theft and a safe-keeping role for banks into monetary theory. This provides a general equilibrium framework for analyzing...

Yugoslav inflation unfolded as a classic wage-price-exchange rate spiral through the 1970s and 1980s and exploded into hyperinflation in the last quarter of 1989. This paper examines the process of monetary accommodation of inflation, the behavior of demand for money, and the interaction between...

This paper examines the evolution of the exchange rate of the ruble vis-agrave;-vis the U.S. dollar from exchange rate unification, in July 1992, to the end of 1993. The expected and actual paths of the exchange rate are related to the exchange and trade regime and to the stance of financial and...

After the switch to a floating exchange rate in 1973, the Swiss National Bank at first adopted annual monetary targets and in the 1990s shifted to a medium-term targeting strategy. In this paper I review the SNB's internal policy analysis, an aspect of Swiss monetary targeting that has received...

During the turbulent 1970s and 1980s the Bundesbank established an outstanding reputation in the world of central banking. Germany achieved a high degree of domestic stability and provided safe haven for investors in times of turmoil in the international financial system. Eventually the...

This paper provides an overview of inflation developments in Vietnam in the years following the doi moi reforms, and uses empirical analysis to answer two key questions: (i) what are the key drivers of inflation in Vietnam, and what role does monetary policy play? and (ii) why has inflation in...

In recent years, the industrial organization of the banking system has received a large amount of attention. In particular, it is generally viewed that the size distribution of the banking sector has changed where it is dominated by a small number of large institutions. In this paper, we develop...

This paper addresses the perspective of Hayek’s doctrine on monetary arrangements in the economy and his favorable argument for an international central bank over national central bank. I also discussed Hayek’s view on free banking (i.e. for the free issue of bank notes) that would enable...

What is the optimum quantity of money in a society? This paper answers this question both from the perspective of a utility maximizing model with real balances in the utility function, and employing an inventory theoretic model which focuses attention on the costs of transacting in different...

This paper examines measures of excess liquidity for Turkey and the role they play on the future price developments. The measures used in the study are the real money gap and its various sub-components such as pure money shocks and excess liquidity due to the money market. The coefficients,...