Arbeitspapier
Banking Panics and Liquidity in a Monetary Economy
This paper studies banks’ liquidity provision in the Lagos and Wright model of monetary exchanges. With aggregate uncertainty we show that banks sometimes exhaust their cash reserves and fail to satisfy their depositors’ need of consumption smoothing. The banking panics can be eliminated by the zero-interest policy for the perfect risk sharing, but the first best can be achieved only at the Friedman rule. In our monetary equilibrium, the probability of banking panics is endogenous and increases with inflation, as is consistent with empirical evidence. The model derives a rich array of non-trivial effects of inflation on the equilibrium deposit and the bank’s portfolio.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 6722
- Klassifikation
-
Wirtschaft
Money and Interest Rates: General
- Thema
-
money search
monetary equilibrium
banking panic
liquidity
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Matsuoka, Tarishi
Watanabe, Makoto
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2017
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Matsuoka, Tarishi
- Watanabe, Makoto
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2017
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