This paper develops the framework of analysis of monetary systems put together by authors such as Macleod, Keynes, Innes, and Knapp. This framework does not focus on the functions performed by an object but rather on its financial characteristics. Anything issued by anybody can be a monetary...

Abstract Negative interest rates policies (NIRP), usually depicted in economic textbooks as an impossibility due to the prospect of infinite demand for money, are now a reality in several countries due to different reasons. But while the ZLB has been surpassed when it comes to Central Banks, it...

We study the impact of different central bank communication practices on the trading behavior and profitability of fast and slow traders in the foreign exchange market. We focus, in particular, on how the Bank of Japan's practice of introducing some randomness to the time at which it releases...

The paper reviews the current literature on the subject in both the New Consensus and Post Keynesian frameworks. It shows that both approaches give to central banks a wrong goal (inflation, distribution, curbing speculation, and so on) and a wrong instrument (interest rate rule). The paper...

We develop a model of asset exchange and monetary policy, augmented to incorporate a housing market and a frictional financial market. Homeowners take out mortgages with banks using their residential properties as collateral to finance consumption. Banks use mortgages and government liabilities...

In recent years, as a result of the financial crisis, several proposals have been put forward to restore some role for gold in the monetary system. In particular, there has been a proposal to employ gold as a nominal anchor or asset for the exchange rates between the most important and tradable...

The language of discretion offers little information about monetary policy beyond the assurance that policymakers always “do the right thing at the right time”. This language renders problematic the reconciliation of central bank independence with accountability. Monetary policymakers should...

This paper traces R. G. Hawtrey’s main contributions to the theory of the lender of last resort national both (LLR) and international (ILLR). This theory is a continuation of one of the traditions of the classical period, started by Henry Thornton (1802) , that differs in important points from...

After more than two decades of inflation targeting in the world, it is important to evaluate if the adoption of this regime in a relevant developing country contributed to the creation of a better environment for the process of entrepreneurs' expectations formation. Brazil is part of an...

We propose an indicator of the degree of conservativeness of an independent central bank and we derive its optimal social value. We show that from a normative perspective, one can either design a central bank that cares about public spending or that it does not -but in the latter case the...