Implicit interest on demand deposits
AbstractTraditionally, monetary theory assumes money bears zero interest. More recently, it has been recognized that banks implicitly pay interest through providing free services. In this paper, the implicit interest rate is estimated from two different sources. Implicit interest appears to be about one-half of what a competitive rate would be in the absence of the prohibition against explicit interest.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Monetary Economics.
Volume (Year): 5 (1979)
Issue (Month): 4 (October)
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Web page: http://www.elsevier.com/locate/inca/505566
Other versions of this item:
- Richard Startz, . "Implicit Interest on Demand Deposits," Rodney L. White Center for Financial Research Working Papers 4-79, Wharton School Rodney L. White Center for Financial Research.
- Richard Startz, . "Implicit Interest on Demand Deposits," Rodney L. White Center for Financial Research Working Papers 04-79, Wharton School Rodney L. White Center for Financial Research.
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