Are There Optimal Multiple-Reserve Requirements?
AbstractA number of developing countries have adopted deficit-finance regimes involving multiple reserve requirements. One question the previous literature on this phenomenon has not addressed is whether multiple-reserves regimes can improve on regimes involving single-currency-reserve requirements if the policy settings of the latter regimes are assumed to be chosen optimally. We find that a "conventional" multiple-reserves regime--a regime with positive nominal rates on reservable bonds--cannot Pareto-improve an optimal single-currency-regime but can, in some cases, increase social welfare over such a regime.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Financial Intermediation.
Volume (Year): 10 (2001)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/locate/inca/622875
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"A public finance analysis of multiple reserve requirements,"
99-19, Federal Reserve Bank of Atlanta.
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