The e-monetary theory

The e-monetary theory

The author develops a dynamic model with two types of electronic money: reserves for transactions between bankers and zero-maturity deposits for transactions in the non-bank private sector. Using this model, he assesses the efficacy of unconventional monetary policy since the Great Recession. After...

Full description

Bibliographic Details
Main Author: Ngotran Duong
Format: Article
Language:English
Published: De Gruyter 2020-12-01
Series:Economics : the Open-Access, Open-Assessment e-Journal
Subjects:
interest on reserves
quantitative easing
unwinding qe
e-money
excess reserves
raise rate raise money supply
e4
e5
Online Access:https://doi.org/10.5018/economics-ejournal.ja.2020-13
Description
Summary:The author develops a dynamic model with two types of electronic money: reserves for transactions between bankers and zero-maturity deposits for transactions in the non-bank private sector. Using this model, he assesses the efficacy of unconventional monetary policy since the Great Recession. After quantitative easing, keeping the interest on reserves near zero too long might create deflation. The central bank can safely get out of the “low rate-cum-deflation” trap by “raising rate and raising money supply”.
ISSN:1864-6042

Similar Items