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dc.contributor.author
Faure, Salomon
dc.contributor.author
Gersbach, Hans
dc.date.accessioned
2021-03-10T08:38:52Z
dc.date.available
2017-06-12T16:51:47Z
dc.date.available
2021-03-10T08:38:52Z
dc.date.issued
2016-07
dc.identifier.issn
0265-8003
dc.identifier.uri
http://hdl.handle.net/20.500.11850/123302
dc.description.abstract
We develop a general equilibrium model to study money creation by private banks and examine the impact of monetary policy and capital regulation. There are two production sectors, financial intermediation, aggregate shocks, safe deposits, and two types of money creation: private deposits when banks grant loans to firms or to other banks and central bank money when the central bank grants loans to private banks. We show that in the baseline model, equilibria yield the first-best level of money creation and lending, regardless of the monetary policy or capital regulation. If we add price rigidities coupled with the zero lower bound, there may be no equilibrium with banks, but undernormal economic conditions, an adequate combination of monetary policy and capital regulation can restore the existence of equilibria and efficiency. Finally, we show that Forward Guidance and capital regulation can only avoid a slump in money creation and lending if economic conditions are sufficiently favorable.
en_US
dc.language.iso
en
en_US
dc.publisher
Centre for Economic Policy Research
en_US
dc.subject
Money creation
en_US
dc.subject
Bank deposits
en_US
dc.subject
Capital regulation
en_US
dc.subject
Zero lower bound
en_US
dc.subject
Monetary policy
en_US
dc.subject
Price rigidities
en_US
dc.title
Money Creation, Monetary Policy, and Capital Regulation
en_US
dc.type
Working Paper
ethz.journal.title
CEPR Discussion Papers
ethz.pages.start
DP11368
en_US
ethz.code.jel
JEL - JEL::D - Microeconomics::D5 - General Equilibrium and Disequilibrium::D50 - General
en_US
ethz.code.jel
JEL - JEL::E - Macroeconomics and Monetary Economics::E4 - Money and Interest Rates
en_US
ethz.code.jel
JEL - JEL::E - Macroeconomics and Monetary Economics::E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit
en_US
ethz.code.jel
JEL - JEL::G - Financial Economics::G2 - Financial Institutions and Services::G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages
en_US
ethz.publication.place
London
en_US
ethz.publication.status
published
en_US
ethz.leitzahl
ETH Zürich::00002 - ETH Zürich::00012 - Lehre und Forschung::00007 - Departemente::02120 - Dep. Management, Technologie und Ökon. / Dep. of Management, Technology, and Ec.::03729 - Gersbach, Hans / Gersbach, Hans
en_US
ethz.leitzahl.certified
ETH Zürich::00002 - ETH Zürich::00012 - Lehre und Forschung::00007 - Departemente::02120 - Dep. Management, Technologie und Ökon. / Dep. of Management, Technology, and Ec.::03729 - Gersbach, Hans / Gersbach, Hans
ethz.identifier.url
https://cepr.org/active/publications/discussion_papers/dp.php?dpno=11368
ethz.date.deposited
2017-06-12T16:53:33Z
ethz.source
ECIT
ethz.identifier.importid
imp593654ea4bfb967977
ethz.ecitpid
pub:185686
ethz.eth
yes
en_US
ethz.availability
Metadata only
en_US
ethz.rosetta.installDate
2017-07-15T20:32:57Z
ethz.rosetta.lastUpdated
2020-02-14T17:34:03Z
ethz.rosetta.exportRequired
true
ethz.rosetta.versionExported
true
ethz.COinS
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