The Problem of Excess Reserves, Then and Now
AbstractThis working paper looks at excess reserves in historical context and analyzes whether they constitute a monetary policy problem for the Federal Reserve System (the "Fed") or a potential-ly inflationary problem for the rest of us. Generally, this analysis shows that both absolute and relative sizes of excess reserves are a big problem for the Fed as well as the general public because of their inflationary potential. However, like all contingencies, the timing and extent of the damage that reserve-driven inflation might cause are uncertain. It is even possible today to find articles in both scholarly circles and the popular press arguing either that the inflationary blow-off might never happen or that an increasing tendency toward prolonged deflation is the more probable outcome.
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Bibliographic InfoPaper provided by Levy Economics Institute, The in its series Economics Working Paper Archive with number wp_763.
Date of creation: May 2013
Date of revision:
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Web page: http://www.levyinstitute.org
Excess Reserves; Federal Reserve; Fed; European Central Bank; ECB; Quantitative Easing; Monetary Stimulus;
Find related papers by JEL classification:
- E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-06-04 (All new papers)
- NEP-CBA-2013-06-04 (Central Banking)
- NEP-MAC-2013-06-04 (Macroeconomics)
- NEP-MON-2013-06-04 (Monetary Economics)
- NEP-PKE-2013-06-04 (Post Keynesian Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Meltzer, Allan H., 2003. "A History of the Federal Reserve, Volume 1: 1913-1951," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226519999.
- William Greider, 2013. "Debt Relief and the Fed's Money-creation Power," Economics Policy Note Archive 13-07, Levy Economics Institute, The.
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