An Endogenous Money Perspective on the Post-Crisis Monetary Policy Debate

Review of Keynesian Economics, Vol. 1 No. 2, Summer 2013, pp. 171-194

24 Pages Posted: 31 Dec 2012 Last revised: 1 Jul 2013

See all articles by Scott T. Fullwiler

Scott T. Fullwiler

Wartburg College; Bard College - The Levy Economics Institute

Date Written: December 29, 2012

Abstract

A number of debates are taking place regarding the appropriate response of monetary policy both to the crisis and the Great Recession that followed, particularly in regard to interest on reserve balances and so-called unconventional monetary policy operations. This paper describes in detail an endogenous money perspective on the interactions between central bank operations and banks, and then shows that interest on reserve balances does not impede the transmission of monetary policy, while quantitative easing does not necessarily enhance it.

Keywords: endogenous money, central bank operations, interest on reserves, quantitative easing

JEL Classification: E4, E5, E6

Suggested Citation

Fullwiler, Scott T., An Endogenous Money Perspective on the Post-Crisis Monetary Policy Debate (December 29, 2012). Review of Keynesian Economics, Vol. 1 No. 2, Summer 2013, pp. 171-194. Available at SSRN: https://ssrn.com/abstract=2194959 or http://dx.doi.org/10.2139/ssrn.2194959

Scott T. Fullwiler (Contact Author)

Wartburg College ( email )

222 Ninth St. NW
Waverly, IA 50677
United States

Bard College - The Levy Economics Institute ( email )

Blithewood
Annandale-on-Hudson, NY 12504-5000
United States

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