Private Money and Equilibrium Liquidity
Can creation of private money by financial intermediaries fulfill the liquidity needs of the economy? The answer is no if the market is run only by forces of free competition. Multiple equilibria are possible: equilibria with complete satiation of liquidity and absence of default coexists with ones characterized by shortages and partial default. In this framework, capital requirements, distortions to demand or supply of private money, and the role of public liquidity are investigated.
|Date of creation:||2016|
|Contact details of provider:|| Postal: Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA|
Web page: http://www.EconomicDynamics.org/
More information through EDIRC
References listed on IDEAS
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.:
- Jeremy C. Stein, 2012. "Monetary Policy as Financial Stability Regulation," The Quarterly Journal of Economics, Oxford University Press, vol. 127(1), pages 57-95.
- Ricardo Lagos, 2011.
"Asset Prices, Liquidity, and Monetary Policy in an Exchange Economy,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 43, pages 521-552, October.
- Ricardo Lagos, 2009. "Asset Prices, Liquidity, and Monetary Policy in an Exchange Economy," 2009 Meeting Papers 390, Society for Economic Dynamics.
- Del Negro, Marco & Sims, Christopher A., 2015. "When does a central bank׳s balance sheet require fiscal support?," Journal of Monetary Economics, Elsevier, vol. 73(C), pages 1-19.
- Christopher Sims & Marco Del Negro, 2014. "When does a central bank's balance sheet require fiscal support?," 2014 Meeting Papers 763, Society for Economic Dynamics.
- Del Negro, Marco & Sims, Christopher A., 2014. "When does a central bank’s balance sheet require fiscal support?," Staff Reports 701, Federal Reserve Bank of New York.
- Marco Bassetto & Todd Messer, 2013. "Fiscal Consequences of Paying Interest on Reserves," Fiscal Studies, Institute for Fiscal Studies, vol. 34, pages 413-436, December.
- Marco Bassetto & Todd Messer, 2013. "Fiscal consequences of paying interest on reserves," Working Paper Series WP-2013-04, Federal Reserve Bank of Chicago.
- Lagos, Ricardo, 2010. "Asset prices and liquidity in an exchange economy," Journal of Monetary Economics, Elsevier, vol. 57(8), pages 913-930, November.
- Ricardo Lagos, 2005. "Asset Prices and Liquidity in an Exchange Economy," 2005 Meeting Papers 143, Society for Economic Dynamics.
- Ricardo Lagos, 2006. "Asset prices and liquidity in an exchange economy," Staff Report 373, Federal Reserve Bank of Minneapolis.
- Bruce D. Smith, 2002. "Monetary Policy, Banking Crises, and the Friedman Rule," American Economic Review, American Economic Association, vol. 92(2), pages 128-134, May.
- Townsend, Robert M., 1979. "Optimal contracts and competitive markets with costly state verification," Journal of Economic Theory, Elsevier, vol. 21(2), pages 265-293, October.
- Robert M. Townsend, 1979. "Optimal contracts and competitive markets with costly state verification," Staff Report 45, Federal Reserve Bank of Minneapolis.
- Thomas J. Sargent, 2011. "Where to Draw Lines: Stability Versus Efficiency," Economica, London School of Economics and Political Science, vol. 78(310), pages 197-214, April. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:red:sed016:690. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann)
If references are entirely missing, you can add them using this form.