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Titel: 

Credit Risk, Excess Reserves and Monetary Policy: The Deposits Channel

Dokument gelöscht auf Wunsch der Autor:in bzw. der Herausgeber:in.

Autor:innen: 
Erscheinungsjahr: 
2018
Schriftenreihe/Nr.: 
Discussion Paper Series, Centre for Growth and Business Cycle Research, University of Manchester No. 236
Verlag: 
University of Manchester, Centre for Growth and Business Cycle Research, Manchester
Zusammenfassung: 
This paper examines the role of the precautionary demand for liquidity and the interest on reserves as two potential determinants of the deposits channel that can help explain the role of monetary policy, particularly at the near zero-bound. At high levels of precautionary liquidity hoarding the optimal policy response of a Taylor rule is shown to indicate a zero weight on inflation. This result is explained by the effect that the demand for liquidity has on the deposit rate which determines the intertemporal choices of households. Similarly, through its effect on the deposits channel the interest on reserves can act as the main tool of monetary policy, that is shown to provide higher welfare gains in relation to a simple Taylor rule. This result is shown to hold at the zero-bound and it is independent of the precautionary demand for liquidity, or fiscal theory of the price level properties.
Schlagwörter: 
Deposits channel
zero-bound monetary policy
excess reserves
credit risk
balance sheet channel
interest on reserves
required reserve ratio
welfare
DSGE models
JEL: 
E31
E32
E44
E52
E50
G28
Dokumentart: 
Working Paper

Datei(en):
Dokument gelöscht auf Wunsch der Autor:in bzw. der Herausgeber:in am: 17. September 2018


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