Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
9548824 | Economic Modelling | 2005 | 26 Pages |
Abstract
Few governments in developed economies currently pay interest on reserves. However, Goodfriend (2001) [Goodfriend, M., 2001. Interest on reserves and monetary policy, mimeo, Federal Reserve Bank of Richmond] concludes that it is a useful tool to implement monetary policy. In a monetary growth model with a financial intermediary and a firm who needs to borrow to pay wages, it is shown that paying interest on reserves financed by a labor tax reduces welfare.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Esther Fernández,