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In response to the financial crisis of 2007/08, all major central banks decreased interest rates to historically low levels and created large excess reserves. Central bankers and academics currently discuss how to implement monetary policy, going forward. We find that paying interest on reserves...
Persistent link: https://www.econbiz.de/10011790398
We develop a model in which financial intermediaries hold liquidity to protect themselves from shocks. Depending on parameter values, banks may choose to hold too much or too little liquidity on aggregate compared with the socially optimal amount. The model endogenously generates a situation of...
Persistent link: https://www.econbiz.de/10011419845
This paper aims to integrate the money market into the structure of the economy. The microfoundation is the starting point to define the money market and the general equilibrium mechanism of the economy. On this basis, this research seeks a linking mechanism of the money market with economic...
Persistent link: https://www.econbiz.de/10013040920
This paper shows that depending on the distribution of banks' uncertain liquidity needs and on how monetary policy is implemented, frictions in the interbank market may reinforce the effectiveness of monetary policy. These frictions imply that with its lending and deposit facilities the central...
Persistent link: https://www.econbiz.de/10010384796
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This paper shows that depending on the distribution of banks' uncertain liquidity needs and on how monetary policy is implemented, frictions in the interbank market may reinforce the effectiveness of monetary policy. The frictions imply that with its lending and deposit facilities the central...
Persistent link: https://www.econbiz.de/10010252806
Persistent link: https://www.econbiz.de/10011516531
structure, I find that the average monthly interest rates implied by the expectations theory is consistent with the pattern of …
Persistent link: https://www.econbiz.de/10011536719
Persistent link: https://www.econbiz.de/10010488940