Abstract

http://ssrn.com/abstract=1874838
 
 

References (35)



 
 

Citations (5)



 


 



The Optimal Conduct of Monetary Policy with Interest on Reserves


Anil K. Kashyap


University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Jeremy C. Stein


Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

June 29, 2011

Chicago Booth Research Paper No. 11-20
Fama-Miller Working Paper

Abstract:     
In a world with interest on reserves, the central bank has two distinct tools that it can use to raise the short-term policy rate: it can either increase the interest it pays on reserve balances, or it can reduce the quantity of reserves in the system. We argue that by using both of these tools together, and by broadening the scope of reserve requirements, the central bank can simultaneously pursue two objectives: i) it can manage the inflation-output tradeoff using a Taylor-type rule; and ii) it can regulate the externalities created by socially excessive short-term debt issuance on the part of financial intermediaries.

Number of Pages in PDF File: 31

working papers series


Download This Paper

Date posted: June 30, 2011 ; Last revised: April 4, 2013

Suggested Citation

Kashyap, Anil K. and Stein, Jeremy C., The Optimal Conduct of Monetary Policy with Interest on Reserves (June 29, 2011). Chicago Booth Research Paper No. 11-20; Fama-Miller Working Paper. Available at SSRN: http://ssrn.com/abstract=1874838 or http://dx.doi.org/10.2139/ssrn.1874838

Contact Information

Anil K. Kashyap (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-7260 (Phone)
773 702-0458 (Fax)
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
773-702-7260 (Phone)
773-702-0458 (Fax)
Jeremy C. Stein
Harvard University - Department of Economics ( email )
Littauer Center
Cambridge, MA 02138
United States
617-496-6455 (Phone)
617-496-7352 (Fax)
HOME PAGE: http://post.economics.harvard.edu/faculty/stein/stein.html
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Feedback to SSRN


Paper statistics
Abstract Views: 1,002
Downloads: 219
Download Rank: 79,217
References:  35
Citations:  5

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.344 seconds