A public finance analysis of multiple reserve requirements

Arbeitspapier

This paper analyzes multiple reserve requirements of the type that have been imposed by a number of developing countries. We show that previous theoretical work on this topic has not succeeded in providing a social welfare rationale for the existence of multiple reserve requirements: in the basic reserve requirements model, any allocation that can be supported by a multiple-reserves regime can also be supported by a single-bond reserve requirement. We go on to present extended versions of the model in which it is possible for a multiple-reserves regime to improve social welfare relative to any single-reserve (currency or bond) and/or deposit-tax regime. We demonstrate the empirical plausibility of our approach by providing a case study of Mexico, a country with extensive historical experience with multiple reserve requirements

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 98-1

Classification and Topics

• Classification: Wirtschaft
• Subject: Developing countries ; Finance ; Public

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Espinosa-Vega, Marco ; Russell, Steven
• Event: Veröffentlichung
• (who): Federal Reserve Bank of Atlanta
• (where): Atlanta, GA
• (when): 1998

Further information

• Handle: http://hdl.handle.net/10419/100822
• Last update: 10.03.2025, 11:42 AM CET