The author develops a dynamic model with two types of electronic money: reserves for transactions between bankers and … raising money supply". …

the Friedman rule is not optimal, the optimal money growth rate lies between the Friedman rule and a constant money stock …

individual banks that face random investment opportunities by creating inside money. Banks are subject to a reserve requirement … and have access to the interbank money market. The model shows that lowering the money market rate relative to the … inflation rate reduces investment and welfare. This is because the money market is an outside option for banks that face bad …

This paper studies the efficiency of electronic money system by focusing on the decentralized setting of issuance. In … the model competitive money issuers can create small denominated money (or e-money) backed by large denominated government … moral hazard incentive requires the more government bonds for the issuers to provide the same amount of money. In general …

. Specifically, they characterize the optimal return on money in the presence of credit arrangements. There is a dual role for credit …: It allows buyers to trade without fiat money and also permits them to borrow against future income. However, not all … traders have access to credit. As a result, there is a social role for fiat money because it allows agents to self …

Lucas (1972) is the pathbreaking analysis of the neutrality and temporary non-neutrality of money. But our central … banks set interest rate targets, and do not even pretend to control money supplies. How is inflation determined under an …

Lucas (1972) is the pathbreaking analysis of the neutrality and temporary non-neutrality of money. But our central … banks set interest rate targets, and do not even pretend to control money supplies. How is inflation determined under an …