EconStor >
Bard College, Annandale-on-Hudson (NY) >
Levy Economics Institute of Bard College >
Working Papers, Levy Economics Institute of Bard College >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/31702
  

Full metadata record

DC FieldValueLanguage
dc.contributor.authorWray, L. Randallen_US
dc.date.accessioned2010-05-14T11:10:04Z-
dc.date.available2010-05-14T11:10:04Z-
dc.date.issued2007en_US
dc.identifier.urihttp://hdl.handle.net/10419/31702-
dc.description.abstractWhile the mainstream long argued that the central bank could use quantitative constraints as a means to controlling the private creation of money, most economists now recognize that the central bank can only set the overnight interest ratewhich has only an indirect impact on the quantity of reserves and the quantity of privately created money. Indeed, in order to hit the overnight rate target, the central bank must accommodate the demand for reserves, draining the excess or supplying reserves when the system is short. Thus, the supply of reserves is best characterized as horizontal, at the central bank’s target rate. Because reserves pay relatively low rates, or even zero rates (as in the United States), banks try to minimize their holdings. Over time, they continually innovate, as they seek to minimize costs and increase profits. This includes innovations that reduce the quantity of reserves they need to hold (either to satisfy legal requirements, or to meet the needs of check cashing and clearing), and also innovations that allow them to increase the rate of return on equity within regulatory constraints, such as those associated with Basle agreements. Such behavior has been a central concern of the structuralist approachwhich argued that it is too simplistic to hypothesize simple horizontal loan-and-deposit supply curves.en_US
dc.language.isoengen_US
dc.publisherThe Levy Economics Inst. of Bard College Annandale-on-Hudson, NYen_US
dc.relation.ispartofseriesWorking papers // The Levy Economics Institute 512en_US
dc.subject.jelB5en_US
dc.subject.jelE0en_US
dc.subject.jelE4en_US
dc.subject.jelE5en_US
dc.subject.ddc330en_US
dc.subject.keywordMonetary Theory and Policyen_US
dc.subject.keywordHorizontalisten_US
dc.subject.keywordStrucuralisten_US
dc.subject.keywordMoney Supplyen_US
dc.subject.keywordCentral Bank Targetsen_US
dc.subject.keywordCentral Bank Independenceen_US
dc.titleEndogenous money: structuralist and horizontalisten_US
dc.typeWorking Paperen_US
dc.identifier.ppn571704530en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:Working Papers, Levy Economics Institute of Bard College

Files in This Item:
File Description SizeFormat
571704530.pdf73.74 kBAdobe PDF
No. of Downloads: Counter Stats
Show simple item record
Download bibliographical data as: BibTeX

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.